Unlocking the Potential of Web3: Patrick Workman on Brands and Blockchains

Speaker 1: 0:00

Welcome to Marketing Meets Web 3, a podcast that helps marketers navigate the news trends, opportunities and insights surrounding Web 3. Today's conversation is for information purposes only and does not constitute legal or investment advice. Hi everyone.

Speaker 2: 0:24

Welcome back to another episode of Marketing Meets Web 3. Today we have the privilege of speaking with Patrick Workman from Unlock Protocol. Patrick, welcome to the show. Would you mind just kicking off by introducing yourself and telling us a little bit about how you got into this wild world of Web 3?

Speaker 3: 0:40

Absolutely. Thanks for having me. I'm excited to be here today. My background was always in big tech. I was early at Facebook. I went to Instagram to launch advertising. I spent some time at Pinterest, also at Google.

Speaker 3: 0:53

From a Web 3 perspective, I had been a degen within just trading cryptocurrencies starting in about 2015,. But I never really saw a consumer use case for blockchains or crypto. I tried to get a startup off the ground called fanscom. It was a social network for live music fans and I can never find product market fit. The reason being is all the data that I needed in order to connect people before, during and after a concert was held by large ticketing providers. Last, when MySkyteCensus first went up, there was probably a better way to internet. I then joined the kernel program sponsored by GitHub or, excuse me, by Gitcoin, which really opened my eyes to the world of opportunities that existed on chain. With that, I then joined Julien Genestu to build Unlock Protocol. That was launched in 2018 to be a smart contracting system that creates memberships as NFTs with the goal of really unlocking a better Web.

Speaker 2: 1:51

Amazing and Patrick, your role there at Unlock Protocol is.

Speaker 3: 1:55

Yeah, I lead growth and partnerships. So this is everything from event organizers. They're looking to use our events app to working with entrepreneurs and developers in order to build revenue or predictable and recurring revenue models to build businesses on blockchains.

Speaker 2: 2:14

Awesome, that sounds great. You mentioned in your story your intro about how you got into the space, just kind of some of the frustrations from Web 2 that led you to the Web 3 space. I'm curious you've been in it a while now. I'm sure you've had time to refine your thoughts and really kind of understand what the space means for users and the benefits that that brings. So in your mind, what are the benefits of Web 3? How does it change things for everyday users?

Speaker 3: 2:39

Yeah, so I think that if we look at the way the internet is structured today, we're essentially a digital Frankenstein. We have all of our information stored within these large tech platforms.

Speaker 3: 2:53

So I like to use the mental model of there's an island of Google, an island of Meta, an island of Amazon, an island of Apple, and what we do as consumers from a digital perspective is we hop on a boat and we travel across to the ocean to each one of these islands, knock on their doors, enter and then everything we do within that environment is held by those entities. We then get back in our boats, the door is closed and we go to another platform. As a result of that, our digital identities are completely fragmented. There isn't kind of a holistic version of who we are, and in order to create a better internet, that data needs to live on a public layer. And when I refer to data, I'm not referencing personally identifiable information that could be incriminating or kind of expose someone for who they are, but more so like what are these activities?

Speaker 3: 3:44

Where am I going, what do I own and then how can I carry that across multiple platforms? In addition to that, the monetization model of the internet today is built around attention, so the incentive for a big tech platform is keep your eyeballs on the screen on their service as much as possible, because they're packaging your eyeballs in the form of advertising and they're selling your attention to the highest bidder. I believe there's a better way for the internet to be built through a concept of memberships, where people can directly support whatever they're doing online, and through that direct support we're going to create business models for creators, big and small. That cannot be realized today.

Speaker 2: 4:33

Absolutely, and I love the analogy of the boats. I might steal that from you.

Speaker 4: 4:37

I have to say I feel a bit depressed now that you told me all the issues with Web 2. I didn't know there were so many. I mean you stated them in a very clear manner and you made it very obvious to me. And, yeah, I feel a bit depressed now about how we made this work so badly. But so Web 3, I guess, comes to fix some of these. But I mean you see the issues very clearly, so clearly that you could explain it to me and I understood that rather quickly. But for the majority of people I guess they don't see them yet. So, in your opinion, what needs to happen for the mainstream to understand that this could be a better internet?

Speaker 3: 5:19

Yeah. So I think there needs to be better experiences. I think a lot of the initial applications have led with the tech, and if they're not leading with the tech, they're leading with a product that's based on speculation. If you're leading with tech, very few consumers are going to care, and we're seeing that with the total users on kind of blockchains at large around the globe. If the product is speculation, you're only going to drive people to a casino, and the reality is there's only so many consumers that want to play within a digital casino where they're speculating on a product.

Speaker 3: 5:56

So, in order for us to reach mainstream awareness, we need to start thinking about applications that are truly creating more value that can be created within Web 2 today, and there's a lot of applications for this. It's how are you moving payment rails from traditional payment processors on chain? The reason you would do that is there's actually greater margins for the creators in those cases. How are you reducing the tech lift of creating partnerships? By exchanging contract addresses across multiple partners versus having to co-mingle customer databases, align on a common data structure, put things in a clean room and kind of work there. So how do you accelerate partnerships for an organization? So, if we really think about this, as how do we reduce the tech lift in order to create greater experiences versus NFTs or fund by NFTs because token go up? It's going to attract more people.

Speaker 3: 6:57

People want a greater experience and the reality is the internet works really well. You surf around, you sign in with Google, you get access to a website, a way you go. The underlining component of that is the more that we feed into that model. The incentive for Google, as well as all publishers, is keep you on platforms so they can sell more advertising to advertisers in a mass of amounts of revenue. The incentives in that model are whack and we've seen this with information bubbles that have been created due to the incentive of a platform just wanting you to kind of stay there. This is why the greatest minds of our generation have spent their careers building advertising products in order to attach brands to people that are going to hopefully buy the products in which they're selling.

Speaker 2: 7:47

Yeah, no, there's a lot to dig into there, but I want to kind of play off of the idea of better experiences and applications and I think that's a perfect segue into unlock protocol. So tell us a little bit about unlock protocol. What is it? How is it used? What is it used for?

Speaker 3: 8:06

Yeah, so unlock protocol was created by unlock labs, who I work for.

Speaker 3: 8:12

It's an open source protocol that has created memberships as NFTs since 2018. So before, nfts were cool, while they were cool, and now that they're not cool anymore, it's been creating memberships as NFTs, and the concept behind unlock is the ability for creators to deploy contracts that are updatable, future proof as well as programmable. One of the secret sauces of unlock is the ability to put time constraints within a smart contract, because if you can put time constraints within a smart contract, you can create tokens that expire, and if you can create tokens that expire, you can build businesses on blockchains through things like paid memberships, automated recurring subscriptions, credentials, certifications, tickets anything where there's a start and end date. So the conversations that we're having with creators are really based around how do you create predictable and recurring revenue on chain, and not digital experiments in the form of speculative collectibles. So the digital collectibles wave or product as speculation. That really passed us by, because the discussions that we're having are how do you build a business or complement existing business on chain?

Speaker 2: 9:32

So yeah, it makes a ton of sense, I guess, to dig into one thing there. So, this idea of creators, I think we hear that a lot in the Web 3 space. But unlock, how do you think about creators? How would you describe that particular persona? Is that an artist? Is that a developer, a marketer?

Speaker 3: 9:49

Yeah, I'm glad you asked the question because the word creator can be triggering, because what is a creator? In my mindset, a creator is Netflix. A creator could be a mommy blogger. A creator could be somebody that's hosting a dinner party, so it's anyone that's looking to create something that they own. And when a creator is deploying something to a public network, that contract or program that they're deploying then becomes theirs. So we're not focused on. The creator economy is how can we help people move away from being influencers on TikTok and Instagram and all of a sudden, they're going to go on chain and they're going to be just as successful? Because the reality is that's not true. The average creator needs those web, two platforms for distribution, and just because they're moving something to blockchains isn't going to provide that distribution. Those channels just haven't been created yet. So really a catch all, for how can we empower people and corporations in order to own more of who they are and what they're doing and reducing the reliance on third party platforms and their payment processors? Great definition.

Speaker 4: 11:03

Yes, I mean, you're really good at definitions, so I think I can't help myself asking you to define what you mean or how you see memberships before we get into how Web3 can help with memberships.

Speaker 3: 11:20

Yeah. So I think a membership could be a subscription. A membership could be a ticket to an event. A membership could be your passport or driver's license. You are a part of something and, to break it down without crypto babble, it's. Somebody would create a program. That program would then be launched on a network and that program would create memberships and people that have accounts could connect their account to wherever that membership represents in order to get access, as long as that membership was valid and not expired.

Speaker 3: 12:02

So if you think of the use cases, there kind of membership can be leveraged across multiple verticals and multiple use cases as a way for access. I mean your Google single sign on is a membership to Google. You're a Google member, you have Google has all of your information. You're signing, you're using single sign on in order to access information around the Web due to your membership with Google. The same concept can apply in a world where that membership is held in your account, which is a wallet and you're now attaching. You're now connecting your account across multiple properties, and I believe that when more of these membership programs go on chain, that the experience and recommendations that are going to be created for users across the Web will be like things that we can't even imagine today. Think of the greatest recommendation engines of all time, based upon everything that you do online and offline, and what could be created on the other side versus today, in the silos.

Speaker 2: 13:12

Patrick, do you think that concept is intimidating at all to people Just from a privacy perspective or visibility perspective, this idea that everything is out there on the chain, or do you think that's just leveling the playing field for something that's already happening?

Speaker 3: 13:29

I think, the education of out there on the chain. That's really where we have a lot of work to do, because a cryptographic wallet that's associated with a person, that holds memberships from multiple programs and that account is owned by a person, I think the scary part becomes what do those memberships represent? So there's a lot of things that people wouldn't want on chain. You don't want your social security number or telephone number or address or maybe the name on chain, but what you do want, is.

Speaker 3: 14:10

I'm a member of Netflix and here is my token that represents my membership. So when I connect my account to Spotify or the New York Times or Starbucks, I then am noted to be a Netflix member and perhaps they can service me with information, knowing that I'm a member of Netflix as well. So I think it becomes less scary when you break down what these tokens really represent and really eliminate some of that fear of people are going to know my identity and steal my privacy.

Speaker 4: 14:52

I wanted to ask something here, because the way you describe this, it feels like it's going to be a process of people testing, saying that nothing breaks and nothing is dangerous and nothing is wrong with it, and then others coming behind. So at which stage do you think we are at the moment?

Speaker 3: 15:10

I think this journey is.01% finished. We're living in a world of single-player crypto, and what I mean by that is I have a token or a membership and with that I can enter a wallet aware and token enabled space. A lot of those spaces that exist today are I have a token, I get access to a telegram or discord channel, perhaps I have a token and I can access a website for a merchant or a publisher or some SaaS-based business. The idea of moving beyond single-player to multiplayer and truly establishing these interoperable environments where having an account that is owned, that you can use to connect everywhere, that's when I really see the unlock kind of pun intended to occur here, and I believe that's going to be driven by brands, because brands are going to be able to provide better experiences and create brand affinity Through an ecosystem of partnerships that they're going to create.

Speaker 3: 16:22

So think Starbucks has partnerships with Delta, the New York Times, spotify and Equinox and rather than each one of those teams co-mingling their membership data, they would just swap contract addresses for their membership programs and then they would enable experiences and benefits for each other's members. They could either do that directly or in a permissionless way, because all you would need to know is that Patrick Workman connected his account to my website, and Patrick Workman has a token within the Starbucks membership program, so you, as anyone, could then offer me something as being a member of Starbucks. We've yet to see that materialize, but I do think that's the promise of what we're building. It's just we're a long ways from getting there.

Speaker 4: 17:17

We'll be right back after a word from our sponsor.

Speaker 1: 17:21

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Speaker 2: 17:55

Do you think that there's something? Is there a particular inflection point or an unlock that we're that we need to get to before, before we see those sort of multiplayer experiences and consumers have this aha moment, because I mean, for the business it's absolutely customer acquisition, it's retention, but is there some sort of really strong consumer benefit? That's going to be the aha moment where we all look back and say, oh yeah, that was the mobile phone moment when this idea of interoperability really started to play out in a much more meaningful way.

Speaker 3: 18:30

Yeah, I think the experiences need to be created. So it's I visited X and then I took whatever I my membership from X and now I receive benefits on Y and Z, and because I receive benefits across all three of these partners, that sounds great. So now where else can I use this? And then consumer demand increases for these experiences and it's just much easier from a tech lift perspective to swap contract addresses than again coming to customer databases. So I really think it's that value and we do see some kind of interesting projects that are taking off.

Speaker 3: 19:13

Blackbird is a loyalty app that they have a network of restaurants, primarily around New York City, where, if you're a Blackbird member, you have an account that's on chain with a membership and you receive loyalty discounts and potential rewards as you kind of use this across multiple restaurants. And I think that's like a pretty good use case of a multiplayer experience where I now have a membership and because I have this membership, I can unlock things and there's very clear value for the consumer as to why you would use that. What I just described has like they're not leading with this, is an NFT on a blockchain and you can put it in your wallet. That's not it it's you have. You have a membership in your account and you're able to unlock better experiences as a result of having this. I do like the multiple unlock kind of references that we have here too. This is good, I'm expecting.

Speaker 4: 20:14

I'm realizing this is a good name for a company. It's working out very well. I wanted to ask something here. I don't know if you thought about it, but so we are unlocking rewards from different services and products and I wonder if this could suffer a bit from a tragedy of the commons kind of issue, where it's not clear who needs to do the marketing, because it's a connection of different companies and different programs, and well, all of them benefit, but none of them really feel responsible for promoting it. So do you think this could be a problem in these services, for these programs?

Speaker 3: 20:55

Well. So, going back to the single player and multiplayer analogy, I'm putting Starbucks in the center because I do believe that they're one of the leaders in the space. If Starbucks wants to be bigger than Starbucks and retain Starbucks customers through something other than I buy a coffee, I get a point. I buy another coffee, I get another point. I do that 10 times and I receive a free coffee. If Starbucks, as a brand, wants to be bigger than themselves, they have to establish these partnerships that, as a Starbucks customer, I can do more. So in that model, starbucks is the brand, starbucks is the marketer, starbucks is the one promoting these partnerships. The hope would be from Starbucks perspective, is the cross-proportional benefits of doing that would not only benefit Starbucks, but it would also benefit Delta and Equinox and Spotify and all these other partners as well. So I don't think that blockchains are going to eliminate the need for a brand or marketer in order to continue to promote who they are. It just creates the opportunity to make themselves bigger than who they are represented to their consumers today.

Speaker 2: 22:10

Well, speaking of the business side of things you mentioned earlier, that you think that brands are going to be one of the first organizations to move things forward in this sort of multiplayer world. I totally agree with that perspective. By the way, obviously for a brand to get started in this space, it's probably going to fall on their marketing teams, their technology teams, to pull these things together. So, as somebody who's building tools for those types of users, what advice would you give to marketers, technologists, creators in this space who want to get started? Like Web 3 can be intimidating just from a technology point of view. Where do you recommend people start? Just to start experimenting and getting their hands around the opportunity here?

Speaker 3: 22:52

So, when I was working at Facebook, instagram, google and Pinterest and we were talking to brands about what their objectives are and what they were looking to achieve, we never approached it as here's a product, use the product because the product's really great. It was always what are your goals, what are your business objectives, how are you attributing your objectives and how can we create something that's going to show results, rather than look at this is web three and we need to create something in web three because we have Talent associated to it and we have a budget. It's what are we looking to achieve as an enterprise? And then, at a granular level, how could we, how could we potentially use blockchains in order to, in order to accelerate what are larger goals are?

Speaker 3: 23:46

And this could be Complimenting existing loyalty program. It could be through the idea, the concept of partnerships, but it really isn't about using blockchains for the sake of using blockchains. It's how are we doing this with purpose? And many of the activations today have Not been very purposeful. It's been a digital collectible that has been launched with a limited audience of people that really care, leading into the product being speculation and not value creation. We need to move beyond that and we need to really evolve to think about how blockchains can improve Businesses and create predictable recurring sources of revenue, not just kind of a one-and-done kind of shiny object strategy.

Speaker 2: 24:35

I Think it's great advice and completely agree. You know it's. It's not about the tech, it's about the end result. I come from a design thinking background and so in a lot of ways it's. You know. How might we make XY or Z experience better by this enabling technology versus even thinking about the tech first, Patrick, thanks for joining us this afternoon. Where can people go to learn more about yourself and unlock protocol?

Speaker 3: 25:01

So again, thanks for having me. This has been a really fun conversation In order to learn more about unlock protocol. You can, you can go to our site at unlock dash protocol calm. You can also find us on all of the socials at unlock protocol and if you want to learn more about me or just see what I'm doing, I'm at Patrick workman on all of the stuff.

Speaker 2: 25:25

Awesome. Thanks so much for taking the time.

Speaker 3: 25:27

Thank you about yeah absolutely yeah, no thanks for the time and for everyone listening. Please don't hesitate to reach out. We really want to unlock a better web together.

Speaker 4: 25:36

That's another outlook for you. One more All right guys.

Speaker 1: 25:41

Have a great afternoon Thanks again. Thanks for listening to marketing meets web 3. If you enjoyed today's episode, please like and subscribe in your favorite podcast app you.