Fireside With Pudgy Penguins' Luca Netz l KBW2024

[Music] am I am I in the mic right now so good afternoon everyone we are now joined with a very special guest you have probably seen those cute penguin profile pictures on even on the KBW speakers and uh you might be wondering what that is uh whether you like the nfts already or not uh today we have lucz with us who is leading the Penguins driving to become the most popular penguins in the world also aiming to conquer the web 3's Mass adoption phase via consumer crypto powered by Community culture and distribution Luka absolutely welcome to Soul I'm uh super excited to be here thanks for having me yeah so uh I I mean I know you uh not even in Asia so often uh is this your first time in Soul I uh I was here in Soul last year and I tend to do four five weeks in Asia out of the year uh I mean it must be very exciting for you uh to meet the regional sub communities I mean you were in Malaysia you're in Japan now you're in Soul uh maybe we can give some uh little shout out to the sub Community right now yeah we uh we've got a pretty big community over in Asia so I think one of the beauties of uh you know building Brands like this and and being able to accelerate is this idea that so many different people can participate and kind of grow their own Community within the community and so I I don't think there isn't a major region within Asia in which we uh don't have some sort of presence there I know some of you are right now here uh C can we get some Round of Applause for Luca right now all right all right so before we do talk about penguins I would like to shed some light on your early days so the audience here uh knows more about the context as as you you as a person so you were uh drop out in high school from 16 then you were a millionaire and 19 maybe tell us a little little about yeah I think uh the 60c version not to bore people in the crowd but uh I'm a high school dropout made my first million dollars when I was 18 years old uh monetized social influence and made my career doing that uh I ended up uh building North America's fastest growing toy company in a business called gel Blaster we basically scaled that to 0 to 100 million dollar in sales in 14 months and then uh two and a half years ago we bought pudgy penguin so for most people who don't know I'm actually not the true founder and creator of the penguin uh I was one of the biggest holders and uh I decided to look at the nft landscape and say to myself look uh I think a bunch of people here are you know loving and falling in love with nfds uh but I felt like the way that they were building them was not the way that uh I thought they were supposed to be built so instead of complaining I put my money where my mouth is we bought the business two and a half years ago and it's been a pretty wild ride ever since I mean I do know that you realized you had this playbook in your marketing and toy business experiences and uh maybe that became the context into your capability in pudgey Penguins yeah it was actually funny because a majority of my career was actually spent with influencers and celebrities building Brands around their likeness and so most people don't really you know look at maybe the pudgy the same way that I do but I look at the pudgy penguin as an influencer and celebrity and uh how do you build that to be the most famous penguin around the world and I think one of our short-term goals is how do we become crypto's mascot I think when you look at the universal nature of the pudgy penguin I think it's really well positioned to represent everyone uh from every different region around the world regardless of your demographics or your psychographics or you know your different interests I think the pudgy penguin is universal in the sense uh that it actually could be uh and soon will be uh the the default crypto mascot around the world yes I'm sure it is already at some at some level and uh you're probably going to be making it the most popular penguins in the world so um I mean even people uh would probably don't know that you are a CMO at Von Dutch and uh I mean I'm I'm sure all the Korean community in here uh they know what the brand is and uh I I personally didn't know a lot about your personal experience and before web 3 so I just had to ask you uh so in that context you you know before I guess uh little little back in your history uh you discovered Bitcoin and nft while in your you are already cash king at Los Angeles and know maybe tell us a little about a little more about that yeah I was uh mining uh Bitcoin and ethereum in 2016 always believed in the properties actually uh didn't even think I'd be building in this industry I uh didn't uh didn't know that it necessarily needed me but I think we've kind of carved out a a new future here I think from my perspective crypto is at a point now where I actually believe it as a marketing and branding problem uh so uh I actually think people like myself who specialize in branding and marketing I think it's it's going to be people who understand branding and marketing more so than the researchers and the mathematicians which I think have found huge success in crypto and will continue to find huge success uh but I think a new era and a new paradigm is coming to the industry where people who understand branding and marketing uh and just Universal adoption I think are going to find uh I think it's going to be our era these next 10 years I mean that's really coming along in your project I mean you keep telling people that you are not the founder but you actually made the project really great and uh you know maybe tell us a little more about uh you know early days in your py area py era are you uh acquired the project at half million dollars and U maybe uh what people talked about you know I know there were some uh people who didn't believe what you're doing at the moment yeah so we bought uh pugy for $25 million about two and a half years ago I think the common consensus was you know why is this guy buying an nft project he's overpaying uh you know this thing is going to go nowhere we don't need more nfts uh and in reality I don't have that same type of pessimistic mindset I actually looked at the nft space and I thought to myself well look the collectible business is a $500 billion market cap business you know in physical and digital about 1% of those Collectibles are uh actual digital Collectibles yet digital Collectibles have a slew of Pros that physical Collectibles do not digital Collectibles have no inauthenticity issues no spoofing issues no friction when buying or selling no insurance issues and whether you agree and obviously physicals have you know a couple Pros that digitals don't uh but I I think we would all agree that the market cap between physical and digital shouldn't be 99% to one and so ultimately there's going to be a gap that closes and so uh a lot of what inspired us is we actually believe that the couple businesses and the couple companies and brands that are going to be at the Forefront at closing that Gap are ultimately I think going to be businesses that are worth tens if not 20 30 40 50 billion dollars uh and that I think was like the entrepreneurial opportunity uh I think a lot of people were really shortsighted in the in the craze but in in totality uh so much consumption around Collectibles happens around the world and uh I don't think that's going anywhere I think that's only going to be increasing over time uh but I also looked at what I thought was the Traditional landscape today today which was you know when we bought pudgy I didn't think people were actually building Brands the way that they thought they were they were making a ton of money they were minting new collections uh they were collecting royalties But ultimately that's not necessarily what I think these businesses are about uh and so we uh we unfortunately bought the business at the beginning of the bare market so definitely uh we we we got uh a lot of the the hard things that come with building an nft Business Without a lot of the easy things but uh I think that's what made us strong and ultimately what brought us in the position that we're in today uh right now I think uh we are the leading nft project uh if you look at it optimistically if you're look at it pessimistically I think we're one of the leading nft projects uh and now it's uh really Keen for us to just keep doubling down on the IP for those who are not familiar we're in 10,000 retail stores around the country uh or the world we're in every Walmart and Target uh in America we've sold uh just over a million and a half toys in Under 12 months we're clocking in uh 20 to 30 million views across social every single day uh and we're really doing something that I think crypto's never seen before uh and so you know in our own respect we're playing our own role in terms of pushing consumer adoption and being the face of consumer crypto and uh that's the role I think nfts are going to play here I think ultimately you know crypto is taboo crypto is intimidating but collecting is not uh and that's something that I think everybody in this room understands whether you're a crypto offici offici andado or not people love collecting in my case people love cute uh and I think we have a responsibility to bring uh crypto to the masses leveraging those two properties yes that is really great and uh that's probably exactly why I'm wearing this toy right now on on stage as well uh you know I want to shed light on uh selling toys I would say uh so you always mentioned that that selling the goods on blockchain itself doesn't mean it is a web three business and I believe that that is linked to the fundamental value in the punch penguin Community uh you know it's you know you're you're not living behind the customers they're not just simply paying the goods and leave your you know just as Community yeah so I think uh the quote that you're referencing is a lot of people think because they sell something on the blockchain that they're a web 3 business but in reality they're actually just a web to business selling digital products digital products are pretty familiar with most people everybody at some point here has purchased a digital product just because it's on blockchain doesn't mean you're building a web 3 business I actually think a web 3 business is a mindset in how you build this idea that we are building something together as a group as a community to achieve a greater good is what I think defines a web 3 business uh a person coming into web thinking they're coming into web 3 and deploying a mint on blockchain and making 20 3040 million dollars uh they're not building a web 3 business they're building a web 2 business uh and leveraging blockchain rails to do that and so I think there's a delineation I think uh web2 and web 3 is actually a mindset it's not a technology uh building in web 3 is this idea that you know you're a holder of an nft and you are suggesting something and you you have an aligned interest uh by holding this first edition uh that uh that you can kind of factor in and contribute to the overarching uh vision of the brand I think uh web 2 and web 3 I think is sometimes too much delineated by the technology uh when I actually think it's bigger than the technology it's the mindset and the principle that your opinion uh is is relevant and can have significant impact into the future of this brand rather in web 2 you know your opinion doesn't really matter to me I'm just going to make money and and continue to make money and and it's my business I'm going to run it as I choose uh and that's ultimately why I think we've seen so much success compared to the rest I mean it's been a rough uh two and a half years for nfts most people have lost belief but the people who stayed true uh I think uh see the greater vision and a lot of the people uh who I think have found at least some success in in the recent years have been pudgey holders so kudos to them right that that's really essence of what you're doing right now and I believe that you know uh the passion and the love we all have for an IP I feel like that's not originally based on the technology itself you know we've been around for you know you know I don't know how long years and um I believe technology is just there to support the fundamental value uh I mean uh via web 3 we have the community and you are constantly a inspirational figure to the community as well and I believe the holders that came out here just to see you uh all the way out here you know you're always on the internet you're IRL you were at the coffee events it's a little events and uh you know holders are just so happy just to see you and uh as a community members as as well they're contributing into your fundamental value of Ip and uh is there something I guess you get uh as a as a leader from the community I I I think obviously like I think the Gratitude is both ways I think they appreciate the effort that I put in obviously I think I I I do everything physically possible to make sure that we uh we are winning or and that we are succeeding uh but but the the respect is mutual because to to say that uh we have found the success that we found because of me or because of our team uh I think is ultimately a a wrong way of looking at it the pudgy penguin Community is the best community in crypto for you for people who really are around in the crypto industry most people would agree with that statement I mean we are everywhere we are at every event everybody's always doing something and representing uh Us in in a public light and I think when it comes from an nft culture and an nft user base you know some of the most important figures in crypto uh are representing the pudy penguin uh some of the best events and and uh you know the the best Alpha comes from the pudy penguin community and and that's that's not me who's doing that that is people that are are that have fallen in love with the penguin that have fallen in love with the community and it's at this point is really a self-fulfilling prophecy I I really believe that you know even if I wasn't around uh that uh pudgy Penguins would still see its success I kind of uh when I bought it I told I told some of the partners that I bought it with I said this pudgy penguin is going to succeed with or without us I always believe it was the Doge of nfts uh so I think it would have its moment uh but our job as a team is to really accelerate that process so when you see us doing toys when you see us doing content when you see us doing games I'm really just marketing the Penguin and making sure as many people see the penguin as possible and then ultimately because the way nfts are structured there's so little amount of tokens uh that eventually you get supply and demand and uh price appreciation and things work out in your favor so I think that's kind of how we look at things right uh also you know as we're heading into the conclusion in about five minutes uh you know to wrap wrap it up a little early uh you know this this is going to last some sometime as well you know Community culture and distribution is the you know is the narrative in the consumer crypto that we all talk about at this conference in general as well uh you know we all we already talked about the value of community the culture and distribution itself you know uh we are always talking about the content uh you know I I mean some of us are already looking at phone screens uh you know you name it even you're at IRL meeting with you so H how would you say uh the consumer crypto you know as a as a community culture distribution yeah I think I think crypto is now crossing a paradigm shift I think for the last 10 years we've been conditioned uh to really support and Believe on these next breakthrough technological innovations I can tell you somebody who's in Mass who has blockchain and Mass who has hundreds of thousands of people using our blockchain products uh on a weekly basis we have have seen something that I think uh most haven't seen which is I actually believe now the tech is really close to being there from an infrastructural perspective so the next great infrastructure narrative uh I think is almost uh I don't think it's the narrative that's going to stick moving forward nor do I think it's going to be the place where the market rewards uh where the market rewards I think the Paradigm now will turn into who has the greatest Community who has the greatest user base and who has the great greatest uh distribution channels now you see this in web 2 Tech I think llms are a perfect example Claude is just as good now as chat gbt but chat gbt is still the winner why because they have the user base they have the brand and they have the distribution blockchains are coming to the same point every L2 when you look under the hood does pretty much the same thing with maybe a 5 to 10% degre of Separation same thing with most of the l1s if you look under the hood as long as the L1 Works uh you know they they pretty much all relatively do the same thing and function the same the difference between you know a salana and maybe another L1 is salana has so much community so much culture so many builders that the products and the experience just exponentially better and the users are there right the liquidity is there the competition in the game now between the businesses and the projects that win in crypto overs is the one that ones that lose are going to be the ones that have the community culture and distribution no longer do I think uh people are going to fall for this you know new breakthrough Tech Innovation uh because I think we're pretty much there uh I I I believe the Paradigm will now shift into uh a market that now rewards the the group that has the best marketing uh the best community uh and ultimately that will attract Builders because Builders want product Market fit above all else right so maybe that's why you're building an L2 now yeah so so I I think it comes down to maybe the next thing for those of you don't don't are who are not familiar you know pudgy Penguins actually bought an L2 called frame who's LED uh by an amazing developer named cigar our idea there was you know we have all of the users we have the community we have you know the people that are actually wanting to build within our ecosystem uh you know why go build and and bring our user base in that culture to another L2 uh when in reality I think we have the most important part that makes an ecosystem Thrive uh and so we've been building that for the last 2 and a half years in terms of you know that culture and that user base uh but now I think the next chapter for us in terms of really blowing this thing out of the water I kind of almost look at our journey as a pressure cooker you know for the last two and a half years we've been proving ourselves showing the world just how amazing uh you know our our community and our ability to execute in terms of breaking through in a mass and now uh with the L2 which is abstract you know we're really going to take a huge swing at bat here and try to do something uh that has never been done before which is really break consumer crypto in mass in a in a really interesting and unique way which is uh going to be shown here shortly right I mean I I I I know that there are always there are already uh so many applications uh being submitted to become part of your ecosystem already uh maybe you can maybe give us some some Alpha you know what you see what you excited though we have 200 uh 200 Builders building applications and Abstract today uh we're building an ecosystem predicated around fun so I think a lot of problems with blockchains today is I think there's general purpose and if you actually understand the lift of building a general purpose blockchain there's probably three or four teams in crypto that have the resources and actual talent to execute on something like that I think what we want to do is we want to optimize for Consumer applications that are predicated around fun and fun only and once I have millions of people uh in our digital amusement park and in the most fun place in crypto which is going to be this abstract portal which we'll debut here shortly uh then we can upsell them on savings and dii and all the amazing different categories that I think crypto can offer but I think we really have to as an industry have to start taking a more uh chronological and focused approach uh I think most Builders at least in the blockchain world today are super fragmented in how they build everybody tries to do a hundred different things uh in reality we need users and we need a break through to Consumers and we need to do that now uh and I think uh the first way to do that is going be predicated around fun so stay tuned to see what we build over at abstract and uh I think in a couple months time you guys are going to be uh having the most fun you've ever had in crypto in within the ecosystem right uh we have to uh maybe wrap wrap it up and maybe you can attend other POI events there are so many left I believe and uh you know to wrap it up and give us a little more culture Alpha I mean you I know you love the Japanese uh culture businesses as you mentioned pretty often uh you know maybe something you see in Korea uh you know in terms of our collaboration effort well uh we have a partnership with lot so for those are not familiar pgy Penguins uh has a strategic partnership with lot and we were working on some pretty amazing things so hopefully you guys will see us uh in a lot of stores and uh different places uh throughout uh Korea specifically and soul specifically uh here in the coming months I know we're working on some special things right that's that's it for today uh I I I know you will have a wonderful rest of your time in in Korea and thank you so much Luka thanks for having me thank you [Applause] [Music]