A New Global IP Infrastructure in the Age of Generative AI: Git for IP | KBW 2023

they look better in person cool you want to lead off with telling us a little bit about yourself and story protocol and how you came here yeah so I think I just wanted to give a quick background on how I started story protocol uh I've been always interested in the intersection of media entertainment and Tech and you know it's something that you always experience every day and you reading news articles to you know watching Tik Tok videos and you know i' I've been always interested from very young age like what goes behind this how does this work how do they make money and the first company that I've done was around uh uh journalism and and and Tech it was a c pre sub subst and trying to basically help out journalists and bloggers to make money when advertising Revenue was just taken off uh because of Google and Facebook social uh you know marketing the second one was basically radish which is a mobile serialized fiction platform and with the shift to mobile there was this huge kind of uh opportunity and challenge for Publishers to make money from mobile from public uh for from publishing or fiction and we basically at uh kind of combined Candy Crush style mobile micro payment with uh kind of this snack serialized rapid serialization content and the company grew nicely to tens of millions of Revenue but the challenge that I really had with that company at the very end was that we are relying on uh Facebook and Google all these big tech company to get the distribution and discovery that we want so if you are mobile publisher of gaming or this kind of content platforms you end up spending you know half of your VC money or a lot of your VC money to get noticed uh and as I think about that I really try to figure out how do I you know that company uh ended up partnering with kacao and when I um as I after that I've been thinking about I want to really kind of really try to figure out more structural problems it's not about like I've been making content and try to produce content and distribute the content kind how can I change the rules of production and distribution of content and I I frankly I always really envied people who are building Network effect rriv products you know really the Facebook Twitter uh Tik Tok when they started probably they're not spending that much UA money they're like getting word the mouth they're getting bootstrapping Network effect people want to share their content on their own so how do we create a network out of content how do we get when you produce a piece of content when you produce a piece of Ip instead of relying on these big tech companies like Facebook uh Google to uh uh sending them money to get notice or kind of pray for like algorithm Miracle how do you how do you get incentivized and really uh empower the fans and creators around you to evangelize a Content not only that but also really uh build on top of you so that you are not basically relying on your own creativity your own intelligence uh to basically get the best hit content so uh that was the motivation to start with and especially what I was surprised by when I was looking at web 3 IP there was it was when I when we started thinking about story protocol it was like the uh this spring of last year I saw stuff like bour AES I saw all these nft projects uh you know some of them uh didn't end up becoming as sustainable but what was so exciting about that was they weren't spending any AD money they were actually all these holders of the nft they became their own evangelist you know you know you you've seen people who hold Bitcoin how religious they are about sharing and evangelizing their their uh their coin so I was very excited by the fact that now this is applying to content there's a way to create a network around your IP um yeah that's that's how I really thought about okay got excited by blockchain's ability to create a network assign ownership at scale around an IP so that's uh and how do we create rules around that yeah I remember you were telling me yesterday that I think fan fiction.net despite it being you know well God 20 years old 15 years old and terrible UI is still a top 20 website top 100 websites top 100 website um yeah I used to write for fanfiction.net but it's crazy how how strong those Network effects are right when you have content when you have readers it's uh it has some staying power for sure maybe you could talk a little bit about um you know why blockchain and what kind of opportunity story protocol uh and the World building of IP that is unique for blockchain in particular and why you decide to build in like web 3 yeah yeah I I think I I I wasn't very clear about what story protocol is just to kind of really explain it straightforwardly uh for this kind of tech nft focused audience uh we are building I think the closest mental model of what we're building is we're get for IPs with ownership if you think about G 10 GitHub it allowed Global collaboration a scale around software development and you can go into someone else's software or source code and fork and re U kind of add on top of it and make a pull request and someone can merge it in the same way we're building first uh a kind of a standard around data structure standard around how to store your IPS on blockchain um and once that actually that will in include all the IP information but also about uh how you want to let other people build on top of you and comp be have composability around you so then you have a set of modules like licensing module which is kind of what allows you allows you to remix or make a fanfiction out of it legally and commercialize we we have frictionless licensing standards so that people can without going all these middlemen all these lawyers you can just go into plug into someone else's IP extended IP build on top of it and the original Creator can say okay you we're going to do a 30 % ref share uh for uh if you commercialize my IP and you know and so uh and you can go build on top and you can Empower all these other creators to build on top of you so that's kind of that Global IP repository and the set of tools and modules to basically extend that IP is what we're building and the big opportunity at least within the web tree space that I saw was if you uh if you look at the web Tre space there are a lot of of these top artists digital artists that came out from web 3 so you see fous pack people all these great digital artists but if you look at it really the uh there hasn't been a JK rolling or George R Martin equivalent of of of uh talent in web 3 who are scaling using this composability technology using this kind of ownership technology to basically scale their IP because if you I I don't think it's about the fact that the writers don't want to get engaged in web 3 it's the fact that we don't have any way to actually store uh these kind of Rich narrative franchise onto the blockchain so if nft which started as a reference to an image file but you can't build Spider-Man started from Spider-Man comic book not Spider-Man image file uh right so so you need to have a way to store these IPS and have the right modules to do it and and and at the moment if you try to store something like Harry Potter on blockchain you would literally have an image of Harry Potter image of herion and called Harry uh Harry Potter but you need to have the characters you need to have the story you need to have the relation between the characters and then once that's stored we need actually a set of Licensing modules to make that happen because if you every speaker here has been talking about posability interop ability but let's say I you own an isuki Robin if I want to actually use your isuki to build a an animation a short animated shorts I can't do it I need to get to lawyers I need to talk to your Twitter DM it's not possible so if you really want composability to happen if you really want web threee to have the next Marvel next Harry Potter you need that a way to capture these IP on the the blockchain you need someone to figure out globalized uh kind of decentralized Licensing uh set of modules that are going to allow you frictionlessly license off so something that's kind of an upgraded version of cc0 that does it's not just about using someone else's IP for free but it's about if you use your IP and build on top of it you can still share the upsides in a very frictionless way yeah I think it's really cool because you're basically have two innovations right one is just the rails of how you store information and how the protocol operates and how IP is created and stored and then the second one is basically an innovation on licensing and how we do business right because you know in games if you want to license a game it's super complicated you probably need to know the guy hopefully you know the guy because he's probably not going to respond to his code DMS for your Marvel or Disney IP and then you got to go into an agreements MGS royalties licensing fees yada yada yada it probably takes like I don't know half a year a year to get done and there's no easy way for all that to like if you if you really want to actually have the licensing rails you have to have that IP repository with all the IP information uh the right kind of information and also like it's Harry Potter is not just an image there's all these different Atomic units you need to have it rich uh to have it actually as a rich IP and then on top of that you know you you need those licensing modules otherwise you know at the moment you see like two extremes one is a cc0 just just use it build on top of me uh but but there's no value capture mechanism for the IP owner uh the second is one-onone licensing let's go to ca UT WME or let's go to some lawyer let's go to the company and do the one-on-one agreement so it's like a very to extreme so there needs to be in the middle some a very frictionless customizable modular licensing uh rails that people can arm themselves with or this can be done individually by a Creator but we can also just it's an API call we can try to be a backend for some other content platforms so that's uh that's important and I think web 3 has been talking composability but this is the really the real IP rails that is beyond just pointer to image files and real ra uh kind of a licensing remixing rails which is going to make the composability possible is there any particular format of content that you're particularly interested in be it Comics stories manga games any particular one that you want to start with or are you excited about them all I'm to be honest we're excited by all but be but given our uh kind of a you know given I'm my co-founder and I uh have a very kind of uh deep kind of root and experience in storytelling so we definitely want to take a look at storytelling and that was really what I got excited about how do you make the next Marvel The Next Star Wars uh with blockchain because at the moment everyone is just kind of focus on the art right so that that really excited me from the first place so that is very exciting but there are also other fields that are actually so many innovations that are happening with generative Ai and so on so that we want to really uh take seriously yeah yeah maybe this is a good time to talk a little bit about you know the elephant in the room which is AI and kind of how you're reacting to it what your strategy is around it and um what AI will enable for Content Creation in the future I think it's first of all I think it's a really great thing because at the moment social media and ugc made everyone a Creator now with AI a generative AI you're turning in a turning from a Creator into a creative Studio Hollywood level creative Studio you can literally uh imagine a world in two or three years you watch the latest episode of something like Game of Thrones or you know House of Cards and you come up with a next bullet point bullet pointed ideas about the next kind of episode you put that into trash GPT you get a full script and you put that full script into a text to video model like Runway Ai and you can see like a very 20 minute Rich 20 to 30 minute video uh of that uh of of that work but what's really they're also with this huge opportunity for every single Creator they're also a big challenges I think number one is that let's say YouTube I think YouTube on every day there's like few million videos getting uploaded that will 10 to 100x not only that the quality will 10x or 20x so as a single Creator how do you or a studio how do you compete in this world of abundance a super abundance that's very very difficult number two not only that you you know I think there's a huge copyright dumpster uh Fire coming into you it's like another Napster moment because Napster moment is basically distribution cost going to zero everyone can basically replicate IP and just put it uploaded and download it for free and you had this huge you know lawsuits from record labels and all these things now I think I we talked about remixing and we think remixing is a great thing and this is why we are actually building that licensing rail so that people can openly and encourage and impire to do it but now you can see with that kind of Game of Thrones or let's say you know succession AI remix it's a copyright dumpster fire because you have the likeness of everyone all the actors all the voice the IP how do you work that out how do you get through that so uh for us we think our rails can help out in this world of super abundance of high quality High uh uh you know high quality content or high uh so much content coming out there uh for number one for number one issue that abundance issue we think I think the content creators have to realize it's not going to be about just the quality or just distribution it's going to be about creating Community creating a network around their IP like that's going to be the differentiation when there's 20 million 30 million content getting dropped every single day so we want to give our away for Creator to seamlessly let's say okay like what nft projects said I created this IP I'm I'm going to create 10,000 licenses to remix on top of me and you know but in return you have to also have to give me some money and you use the money to boost up the IP but everyone has some IP skin in the game and as the IP grows bigger they they Remix They co-build and you know they and you also as a Creator benefit from from that creativity and secondly for that remixing copyright dumpster issue I think we can be a real help for legacy IPS as well because uh a lot of people will say okay play me this song in tedler Swift style or play this song in Grime style we want to be able to be a seamless backend layer for these uh original Ip creators and owners to get a payout when the all these things are happening opening and you can see you can think that the big Tech is going to do that but at the same time like why we need a stable diffusion and open source llm we need we need a kind of Open Source kind of open layer kind of a global transparent repository that's doing all this payout uh in a in a very seamless way yeah yeah I think the other thing with AI that's interesting to solve is how people will solve discoverability with AI right because you're going to have 10x 100x more content like you said and how are you're going to Bubble Up the best content for people to realize I think this is something that for instance roadblocks does super well right because they have a bunch of algorithms that says hey of your you made a game you have 100 players what is the engagement of those 100 players what is their D1 D7 D30 retention how does that look like okay maybe we'll start bubbling it up based off of that algorithm um so I'm curious to see how you guys um solve that discoverability problem I'm sure you have like lots of different ideas I think uh one other topic that we should probably cover is your strategy for solving the cold start problem and how you're thinking about just launching the company launching the protocol and getting it to scale yeah so I think uh it's a very exciting time for us like just about about a few hours ago we officially launched our company and we uh obviously thanks to Andre congratulations yeah thanks to Andre and hor we kind of announced our $54 million fundraising and that uh fund raise uh we been uh at the moment investing a lot of kind of resources into building this infrastructure first and uh that Global IP repository all these licensing modules but at the same time uh uh one of the things uh from my old experience in the last company is that you do need a real really good IPS uh to to kick off this kind of ecosystem because we uh so that because of that we're really talking to a lot of top-notch um Hollywood creators or IP creators who really excited this technology of scaling ownership uh assigning ownership a scale and using that technology to boost drop their IP so uh we've already have uh very good few projects are that are getting incubated which we'll announce uh hopefully sometime in the future so I think at the moment around the kind of the remixing ugc that kind of the ecosystem uh our strategy has been why don't we have a few uh uh great Hollywood level Tom Notch IP creators to kind of kick off that IP first and then have uh other creators remix on top of it rather than just relying on just create uh just have an open system and okay create a great IP and and uh and and hope that things are getting connected so that's been the approach but Al also at the same time uh you know we're we're we're we're looking at various code of Market strategy we're talking to many partners but also we can we don't need to be always be the destination distribution platform we can help serve other IP projects nft projects or content platforms we can be the backend Global IP repositor we can be the backend licensing rail so it's not about just our first-party apps or applications or IPS getting a destination and distribution we are happy to work with other distribution platform other IP that with distribution to figure out how to store their IPs to have uh so that other people can seamless build on top of them because at the moment even for nft projects if you try to go to them and say uh I want to build on top of you uh to to kind of follow the web through ethos there's no clear way there's no clear way yeah so this is not your first time at the rodeo I think this is your third time founding a company I'm sure there's a lot of aspiring Founders in the audience maybe you could share some stories about lessons that you learned from the first two times around and what you're excited about uh for like what got you engaged and ready for like the third time at the show yeah I think uh I started a few uh two companies the first one didn't work so I had to Pivot within a two years uh and and started uh uh uh radish but I think the kind of the best best advice I've had uh when I was starting off was uh I have a close advisor and Mentor uh his name is Charlie sers he was ex ex- head of strategy Microsoft he said like every startup is an overnight success but it happens on thousandth night or 2000th night so I think it just it does require a lot of persistence and because you have to PIV if you believe in that long-term Vision that's just not going to happen in a year one year two so it takes a long time until you get to that that breakout moment and the graph doesn't look like just up and to the right in a very gradual ramp up way it's flat for like three years four years and then you have a sudden aha moment it grows ex uh grows exponentially right so I think that that I think whenever I see a new founder who's coming to me I said like like let's say it's 2023 your start is your start startup is going to take off in 2029 are you fine with that so I I I always try to set the right exp test up their conviction huh yeah yeah and then if they come back 10 10 time like five times then okay maybe you should start it because you're going to endure through the and I think the grit and persistence is the most important and and and obviously you have to be in the right Market the first market for journalism with me was a very very tough market so so I was very glad I pivoted but you have to question yourself it's not about just persisting and just looking at the screen but you have to every day just critically think of yourself is this the right Market is this the right strategy is this so you have to try like 20 30 different you're just making a jab every day until it's just uh the hole gets poked uh and and penetrated so so I think that's important secondly I think why you you asked me about so that that advice I think is the most important one the persistence grit is just like there are a lot of smart people there's a lot of talented people but there are not many people who indure for five or seven years so that's important secondly I think the another you T talk to me about why I plunged into web 3 because when I looked at web 3 from uh from afar it was always Finance it was always very kind of esoteric infrastructure play and and I when I in 2021 I saw nft and I saw NBA topshot I saw board FC Club I saw that this technology uh has a great uh has a great potential for content maybe just like the intersection of internet and uh and and uh content produced Spotify and Netflix and all these YouTube and Tik Tok and all these content platforms I thought the intersection of content and crypto can bring about the next big uh Disney the next uh the the next Netflix and it was just starting I wanted to be early and to be honest for mobile I started in 2016 I was 8 years after started I thought the crypto content intersection was just starting off in 2021 and although there were so many people really pumping High I thought okay uh it's just the early Innings uh sometimes dust are going to get settled there's going to be more opportunity and I thought you know this I saw this huge rail missing of okay blockchain is about storing these information in a transparent manner no one's figuring out this fundamental problem uh everyone who's interested in infrastructure is doing defi or a very layer one no one's doing an infrastructure for Content no one's doing infrastructure for licensing uh so that was exciting number one number two I thought looking at all these big nft projects everything started from art right everything started from art but art it's great you can have a Jeff kunard that s so sales for $90 million but it's hard for are to scale and create a next big franchise Marvel Star Wars Harry Potter none of that started from an image because you need a story line to scale so I thought okay things are getting being done a little bit in reverse on web 3 if we start from a story first and then be able to scale I think there are some exciting opportunities to create the next big IPS on web 32 so so that was that was kind of what got me into it yeah yeah that makes sense one of the things we talk about a lot at andreon is riding the Next Great Wave because the Great Wave will raise All Ships and so it's very important it's really hard to time the wave honestly because you know there's the VR wave there's a web 3 wave there's an AI wave these things are hard to predict on whether or not the wave will continue and now right like VR back in 2015 2016 didn't quite work out then but now with the Apple Vision Pro maybe it'll work out now and I'm hopeful that you'll ride the next great wave with this uh new startup thank you thank you uh we have four minutes left maybe you could talk a little bit about like one question I love to ask because as a VC uh my job is to be very curious and to learn and to always be learning from the great Founders so curious what's been your greatest learning the last year or so especially in this bare market and everything and what's been like the hardest thing that you've had to do uh honestly uh I think the bare Market has been a little bit of a blessing because I think I think uh the the the bull market was there's so much noise there's so much things happening uh but but now people who are building now they're really are thinking about the substance they're really thinking about because they don't know if the market is going to come back in two or three or four years they need to focus on something that's sustainable they're not here to just build and just a quick flip right you're focus on product product on value so I think that's been very uh uh clarifying uh and I think as you said you you talked about uh the wave and I I would love to ask you about what you your thought is because our topic is about AI but also as a Content media entrepreneur like if the web tree was a very big uh interesting primitive for powering the next big franchise and also kind of powering the next uh big uh big big uh IP repository and all those uh remixing uh remixing Behavior but at the same time like uh generative AI uh is has is just moving so quickly on the content space and I think the core of what I how I view it is it turns everyone into a studio level Creator abundance and also it really heightens and scales a quality and quality of content and now you have to deal with this abundance you have to deal with this new situation everyone becoming creative studio so you know how with that obviously we are building a content and media ecosystem and then we are building an IP infrastructure an ecosystem of apps and add plugins for IPs so how do we respond to this Behavior Uh and how do we respond how do how do you capture this opportunity uh because we think this AI content may end up you know there's already 100 million AI songs that were created in the last one year 15 billion AI images that's going to be a bulk of the content we see how do we deal with the IP rights how do we deal with that so you know I I wasn't looking at this behavior when I this was not part of the vision but now we have to adapt the vision to really contain this huge wave of content coming in so that's been difficult so I also know that you've written some uh a little bit about generan game so I'm pretty curious what do you think about this this kind of New Wave coming in yeah so our thesis on AI and games is we split into two parts the first is weak form Ai and this is basically like AI for production and so this is like democratizing creation of games right so right now you have 2D asset generation you have text to voice pretty solved the big one for games is going to be text to 3D and we have multiple bets in the space trying to go after the text to 3D space um obviously there's also like VFX which is is a big one um and a few other adjacencies that will make it way easier probably bring down games production hopefully from $50 million $100 million to maybe 10 maybe five maybe you can create it in you know a week which is a crazy idea but maybe that'll happen like I'm not a great coder but you know you use chat GPT code interpreter and I made Flappy Birds in about an hour and so it's not a crazy to think that like this will be way advanced in a year um or a few years I think the second piece is strong form AI which we see as basically what are the new core gameplay Loops that are enabled because of AI in particular and so for in really uh increase your retention I guess yeah yeah potentially increase retention new play Loops think about like um I'm sure some of you have read the Stanford paper on generative agents but it's basically like The Sims with AI and what will that look like um we're pretty excited about what that will be but we're not sure like what exact kind of game is going to result from that cool just just like you I'm trying to figure this out on this matter yeah uh I know time's up any last comments thoughts for the crowd no uh so we just launched our company and we think we really want you to join this wave of open- source composable IPS and we think the more of world's IPS are actually have this more of an open composable IP structure I think we will unleash more creativity in the world and we want to have more app developers ecosystem Partners who are going to build with us because uh our customers not only just IP makers but also developers are going to build on top of us so we would love to chat with you uh during this conference or or whenever yeah awesome thanks for your time thanks for listening [Music] everyone