Le Zhang on monetizing intellectual property in metaverse

0:01I'm Ashton Addison from Block West capital for investment pitch media and today on the Crypto Coin Show we have Lee Zhang the CEO and co-founder of Spaceport Lee welcome to the show and thank you for taking the time good to be here Ashton thanks for having me very welcome let's just before we dive into you know what Spaceport working on in terms of Ip and web3 and

0:24And just where this industry is at with that I'd love to just start with a little bit of a background on yourself in blockchain and how that led to starting Spaceport and then we'll dive into all the details yeah sounds good so I'm a Serial entrepreneur I've I've spent a career in digital transformation so helping big Brands like McDonald's

0:47Hyde hotels 7-Eleven digitizer operations that was that was the last that I that I founded and grew to a multi-million dollar business how did I get started in blockchain actually I was if we look back maybe like a year and a half ago I'd say I was pretty big blockchain skeptic at the time I was still working on my last company and while chatting with

1:12my now co-founder Lita about what problems we wanted to work on next right so it was around the time I was exiting my last business and thinking about what we wanted to do right and so the Genesis for Spaceport wasn't in the blockchain it was really focused towards some real world problems that we anticipated and that was around the rise of digital worlds and metaverse

1:37platforms right this kind of like transition and acceleration into into additional platforms that we've all seen during covid right let me let me zoom out and step back to like early 2020 we had just closed a major deal with my last company and a month afterwards covet hit and we had to go fully remote and we had to figure out how do we how do we Implement

2:03our team culture how do we how do we you know get everything set up in this new virtual world and quickly realized that things were accelerating pretty fast towards digital native tools right like digital native platforms we even had this Virtual Office product that we were using where you know people would log on they would like appear as like this little emoji and they can walk

2:25around the different offices and chat with you and it became a crowd favorite and so realized at the time that this was the future and we probably weren't going back and how do how do I how do I work on the next iteration of this how do I help other creators other companies other teams digitize their digitize their their tooling and their operations and so

2:53My co-founder Lena and I when we thought about working on Spaceport full-time we did a survey of the entire let's call it metaverse space right it was this Digital World space and we looked at all the strengths and weaknesses of the different companies that were coming into the space and the largest gaps that we saw one was in hardware and we didn't want

3:14to touch that I let Facebook throw tens of billions of dollars at that problem and the other problem was around content creation and so for a lot of people that have tried metaverse platforms or like VR AR headsets for the first time you probably tried it out for an hour and then you put it down and you didn't touch it again right and I know that was the case for me and

3:39and I think the main reason for that was that there just wasn't a lot of things to do right and we realized that the main reason for this is because there's a lot of first party content there's a lot of Studios a lot of companies that are investing into building this like AAA premium content and acquiring game studios to create that content

3:58But if you look at the real world around us and if you look at the digital world that we interact with today the internet right what we call it Web 2.0 a lot of the content is created Grassroots right it's created by creators like you and me and just spinning up our own websites and collaborating with other creators and other brands and that creates this really

4:18vibrant ecosystem and we wanted to figure out how to how to enable that for digital natives on a large scale and so Spaceport really was filling that Gap and we've created a protocol which allows digital asset owners owners of nfts which is a great building block for digital products truly truly ownable digital products to be able to transfer

4:45rights and licenses rights out to other creators and other companies so that they can co-create and create derivative works we believe that is that is the that is going to be the accelerant for the metaverse that we see in the future wow great backstory Lee and you're completely right about picking up the VR headset for an hour and the

5:10novelty sort of wears off and then you look at the functional use cases and you know besides obviously entertainment and gaming and entertaining yourself with your friends at night how come we apply this into the workforce or bring value to companies and organizations in a way that doesn't impair their work because you know the goggles are too heavy or

5:31the quality of the graphics are low in inside of the metaverse you know when can we get to an eight hour or 12 hour work day in the metaverse and actually feel like we accomplished more than we did in person and I feel like that's a flip that's yet to be switched so I'm excited to see this grow and obviously this is a huge feat to accomplish to get you know the entire

5:53world working inside of a digital space how long from when you started I guess sort of where exactly is Spaceport at right now yeah so we started a venture in January of 2022 so it's been a little over a year now and when we first started I was just myself and my co-founder Lita we were able to pick up momentum pretty quickly we built up an initial team of

6:21senior leaders including licensing experts and IP IP Council that could help us along the way and then we towards the end of last year closed some pretty sizable precede round to help grow further amazing congratulations and I did see that in the news something about three three mil pre-seed funding congratulations especially in 2022

6:45when when the crypto markets in the metaverse projects that were out you know their coins were dropping drastically but I know that there are smart investors looking for in the long term for this so that congratulations on that and I'm curious on you know sort of the differences in the metaverse side and the nft side because when I first think of licensing or

7:07intellectual property you know owning nfts sort of comes to the first thing at hand and what we saw in the last cycle up with profile pictures and you know the board apes and things like that whether they own the IP or not and artists that are able to finally create their own art using the nfts and own that the IP and resell it and things like that's great but how does that

7:29sort of tie into the metaverse and the bigger picture and tying both of those together yeah it's a really good question and you know I think it comes down to what problems are are we solving right and I think the like the last cycle of nfts these pfps these and even like generative art and art projects they were solving different problems than what we're going to see in the

7:54future you know it was for better for worse and very financialized you know a few years and a lot a lot of a lot of the collections that popped up they weren't really solving real world problems right and so what we're thinking about now is when it comes to intellectual property how do we how do we solve problems that we're seeing in the real world today how and

8:19how do we translate them to the blockchain and that's where I think nfts have a lot of power beyond the you know just the ownership of a single pfp how do you take the intellectual property in that in that pfp and then put that to work right how do you create Brands underneath the collections that have already been created and the collections that have yet to be created

8:42that are going to be the future Brands for these metaverse worlds that we were talking about so you know there's I guess we call them like Blue Chip NFC collections you have Ward Apes Zuki ebits these collections which have granted full commercial rights to their owners but we've yet to see that fully tapped and it's a beautiful thing because the

9:06nfts have allowed Independent Artists to sort of be on the same level as some of these Big Brand creators as well but what we've also seen in the nft collections and you know Collectibles is all these biggest all these huge Brands the ones that you mentioned at the beginning that you worked with in your previous startups they're all you know I'm guessing they're taking cautious

9:28approaches but they're all exploring this technology as well and starting to utilize it and get into web 3 to get ahead of the game with what you're working on with Spaceport does the technology apply to you know both big Brands and the little people or are you are you focused in one specific area yeah it really does right so I just to talk about kind of like

9:52fundamentally what we enable here right so if you think about nfts as they exists today there's really two underlying standards you're talking about ERC 721s and 1155s and both of them are great and enabled billions billions of dollars in Commerce but they only encode the concept of ownership right and so as in nft holder I can transfer that nft someone else I can

10:18transfer that ownership and there are some protocols out there that allow you to lend against nft right collateral collateralized lending but we're the first that will allow you to sell rights assigned to that ownership and that applies to everyone right that applies to the independent artist that wants to be able to say take their artwork and slap it onto a t-shirt

10:45either in a metaverse world for avatars or even even for application in the real world right if they wanted to license that out to a merchandiser that wants to sell real world T-shirts they have to go through the process of Licensing and so traditionally what they would have to do is they would have to talk to lawyers they'd have to draft up agreements

11:06they'd have to go through the process of collecting royalty fees and transferring transferring funds and accounting for that and our protocol the Spaceport protocol basically streamlines that entire process end-to-end wow and this applies for the individual individual crater this applies for companies and this also allows for the type of co-creation and collaboration that

11:30you're also starting to see as one of the incentives for large companies to enter the space right so recently in the past few months Nike decided to launch the dot switch campaign is a really really cool really exciting project where Nike is now potentially allowing individuals to co-create Nike apparel and shoes along with the brand right and to be able to

11:56potentially make royalties off of that creation either through metaverse apparel sales or even real world apparel sales right so that technology is fundamentally necessary for Brands and creators to work together and we're building that wow that's very and looking at the first use cases of where you know parts of the metaverse are going to explode it seems like the main trend

12:24is still in the in gaming and entertainment or I'm also seeing fashion and other kind of digital Collectibles as well what do you think it's gonna take for you know an explosion in those areas because you know metaverse has been around since before even nfts existed and everyone always has you know this is going to be the year that it explodes but you know they've been

12:48saying that for five six seven years and it's it's always a slower growth than people think it's it's going to be where do you think we're at with that right now and what do you think it's going to take to get to the next level yeah and this is why you know whenever whenever I use the word metaverse whenever anyone uses word metaverse you

13:08kind of have to back it up and Define what you mean by that because it means 10 different things to attack different people and so for me I really see the metaverse is kind of like the final leg of digital transformation right and so it's it's not like it's not a milestone that we need to hit right it's not a single platform that needs to be launched that everyone uses

13:31You can kind of see it as like the slow progression of things that are physical into things that are digital either products that are physical into products that are digital or experiences that are physical to experiences that are digital and the concept behind this is pretty simple it's digital products tend to be more efficient they're they're more cost

13:51effective they're they're easier to distribute right and so over time we should expect to see a lot more products and experiences transition to digital and we're just now seeing that acceleration of that curve partly because of covid also partly just because of the actual forces of technology and Innovation that's that's happening in the world today right and

14:12so I'd say we're we're already like pretty far along the track to obtaining the metaverse this ultimate you know final leg of digital transformation just the fact that we use computers every single day you know irregardless of the fact we don't have headsets on and you know we're not we're not looking at fully AI world yet we're in a digital world already and

14:34we're starting to see hints that digital products are overtaking physical products I'll use an example here that I noticed a couple months ago and it was in the video game OverWatch right so a really a really popular in-game item nowadays is a gun charm it's this little like keychain that dangles off of your weapon when you're playing these games and something

14:59that other players can see as well right it's a way to kind of show off your personality and show off your progress it's a badge of honor in game and there was a there was a specific charm which is actually licensed from a physical keychain you can you could have bought this physical keychain before it implemented in the game and it costs

15:20more in the game than it does in real life I have to think about like why is that the case right it costs seven dollars in the game five dollars in real life why is that the case because people spend more time in the game they get to show that off more in game they get more utility more value out of it so that's a really important indicator I think that we're already

15:41well on the path to achieving this metaverse of the future great example and I look at it like the internet right there's not one platform that you go to log on to the internet that the metaverse is all of these digital worlds and all of these interactions that we're seeing and you're right it's just going to creep in slowly here and there with all these

16:00little pieces until you know you're in the metaverse 12 hours a day and you don't even realize it you know and I feel like that's what's going to happen is people are gonna like it's gonna come so slowly and just ease right into your life that you're not gonna really see that you've been a part of growing them at averse yourself that's right yeah and you know

16:22hopefully it's not the dystopian version of the future that we see in you know Black Mirror or you know other other movies and TV shows I think really like it's going to augment our day-to-day life make it'll make things easier it'll ultimately help to connect people to each other and for people that have better experiences with each other definitely

16:45and Lee in all of this growth and specifically in 2023 now that the precede funding is closed for Spaceport and what are the next steps for growth for your platform and getting it out into the world great question so we've already started to sign up some notable IP owners on the licensed source side and agency side and so these are these are individuals and

17:11companies that own intellectual property that are looking to license that IP out and we're onboarding some of our largest licensees right now as well and so over the next year we're looking to a sign the first historic unchain licensing deal this will be the first of its kind and then B start to build that flywheel effect of onboarding more and more IP

17:35owners and more and more licensees and really create a like a vibrant ecosystem of Licensing transactions on chain wow very cool and it's always great to be the first of its kind that's it's always a notable achievement so I'm looking forward to that Lee and what is the best way for the viewers to follow along with the updates for Spaceport and for these notable

17:57achievements so you can follow us on Twitter Spaceport XYZ is handled for our company you can follow me as well personally it's lizang l-e-c-h-a-n-g XYZ also on Twitter those are the probably best Avenues right now sounds great Lee and I can leave those in the description box below as well thank you so much for your insights into nfts intellectual property and where we

18:21see the metaverse going I will be following along with the updates for Spaceport and thank you so much for your time so let's definitely follow up in the near future sounds great thank you Ashton