Max Segall on Revolutionizing User Experience with Privy

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.

Speaker 2: 0:23

Welcome back everyone to another episode of Marketing Meets Web 3. Today we are joined by Max Sagal, who is leading product at Privy. Max, thanks for joining us on the show.

Speaker 3: 0:35

It's great to be here. Thanks for having me.

Speaker 2: 0:38

Let's dive right into it. Why don't we start off by just tell us your story? How did you get into Web 3? How did you end up at Privy?

Speaker 3: 0:46

Yeah, so I'll give you my very abridged life story. I'm a New Yorker originally. I was like most good New Yorkers. I started my career in traditional finance. I did a few years at an investment bank and then moved to California to work at an investment fund investing in tech companies. I got hooked on tech and startups and started working at Brex.

Speaker 3: 1:11

After I left my investing job, I was at the FinTech Brex for four years. Absolutely loved it Amazing company. One of the things I realized while at Brex is Brex is one of the most innovative FinTech companies out there, yet it's still built on all of this legacy financial infrastructure. As much innovation as Brex does. We're still dealing with all the shortcomings of the ACH system. Things get even worse when you start trying to move money around internationally.

Speaker 3: 1:45

That's when Web 3 and crypto really clicked for me this promise of instant settlement, digitizing money movement rails. It started to really make sense how massive this is and how big of an improvement versus the status quo. The deeper I went, the more I was like I need to work in this industry. I kept coming back to the same problem that Privy solves I'm sure we'll get into this in a bit which is the tech is so promising and unlocks a bunch of really amazing use cases, but it's still really hard to use.

Speaker 3: 2:19

In order to interact with a blockchain, you need a wallet. Setting up a crypto wallet is a really technical process that most people are going to engage with. If you believe that crypto and Web 3 are going to power more and more real-world applications, you need something like Privy to make it easier to access these applications. So I saw Privy launched. Henry and Asta, the co-founders, seemed like the right people to build a big and enduring business in this space. I found a way to get in touch with them and joined a little over a year ago.

Speaker 2: 2:54

That's my story. Yeah, amazing. One of the themes that we see on this show with the interviews that we talk to is it's generally people that are working in traditional industries in Web 2, and they're finding these limitations of the system In your case, finding the limitations of great companies built on old infrastructure and just hitting some of the limitations and seeing a better way. I think that's really encouraging that there are so many people that are looking to the space and seeing some of these benefits that happen when this technology hits scale. So I'm curious on the Web 3 side, you mentioned a few of the benefits or a couple of the things that we think we can improve with technologies like crypto. What are the other benefits that you see for Web 3? Or, when you sit down and you talk to an every person, how do you explain Web 3 and the value of that?

Speaker 3: 3:49

Yeah. So it depends who I'm talking to. Some people I talk to who are very, you know, their minds are made up. They've kind of read headlines about crypto and have kind of formed their view on the utility of it. And for those people, the money movement use case is the one that I always point back to. So if you're a merchant, you're selling, you know you're selling a product on Shopify, for example, and you make a sale on a Thursday, you don't actually see the money from that sale until Monday or Tuesday of the next week. So that's, you know, almost a full week's lag between when you make a sale and when you get paid. And that is almost entirely due to the way money moves and the ACH system. And so if you had an instant settlement money movement system where you know the moment I make a sale I'm able to use, you know, the money that I earned to scale my business like that's life or death for businesses. And so you know, the use case I always point to for people who are super skeptical on the market is it's basically like going from the pen and paper era of mail to email, and you know people don't look back because it's faster, it's cheaper, you could do more with it, and you know I have no doubt in my mind that the same thing is going to happen to money movement infrastructure, and so stablecoins and crypto rails are the use case I point to first, but there are so many other amazing use cases the deeper you go into the market.

Speaker 3: 5:32

So one of one of previous customers is another company I like to point to. It's called courtyard. They're a physical asset marketplace. You could think of them like an eBay, but they're built on crypto rails and so when you want to sell, you know whether it's a trading card or a pair of sneakers. On courtyard you listed on courtyard they vault the asset for you, verify that it's the asset you say it is, and then they tokenize it. They issue you an NFT. Under the hood it's super abstracted away, so you know you don't have to worry about grappling with the technicals of crypto. But the cool thing that they do is then they go and list this NFT on all the popular NFT marketplaces. And so, because crypto is an open, interoperable system me selling a pair of sneakers, I could tap into a massive universe of buyers. That wouldn't have been possible if courtyard were just you know, a regular physical asset marketplace, so the interoperability benefits like a really cool one, and we're just starting to see some of these use cases take off.

Speaker 2: 6:35

Yeah, that's. I think that's a really great example of, you know, abstracting away all the complexity in the technology and just focusing on the value and the benefits for the consumer. So love, love hearing that perspective.

Speaker 4: 6:48

Yes, I was listening to your story and it's it's good because, well, it's good, of course it's good, but I mean it's similar to mine because I also come from finance and I also found the settlement part and the money part to be quite interesting. And in my conversations, of course, because of my background, this comes up quite a lot. But money and settlements, it's not something that most people really care about a lot. Even in the example that you shared about, you know an e-commerce that is receiving money. They do see that this money is there, it hasn't settled, but they see, they see that, okay, the payment is coming and they are mostly okay with that. I like the courtyard example. I think it's a bit. It's a bit interesting and more and more, probably more easy to easier to explain to them, to the mainstream. But in your opinion, what needs to change for the masses, let's say the mainstream, for Web3, to really make the inroads that we all think that will make sooner or later?

Speaker 3: 7:57

Yeah. So there are two answers, how we think about it at privy. The first is directly related to what we work on, which is making these systems accessible for anyone to use. So today, if you want to use most Web3 apps, you need to take 10 to 12 steps of setting up a wallet, purchasing assets on a centralized exchange, waiting for the money to settle, which is again the money movement use case challenge biting you, getting some, you know, figuring out how to get that money into your self custodial wallet, using the wallet to sign into the app.

Speaker 3: 8:35

It never works on mobile. There are like 15 reasons why you're not going to do it, and so use case has to be so burningly compelling. You know that people are willing to you know, in RV, to through glass to get up and running on these apps, which is a massive barrier to adoption. So you know, one thing that absolutely needs to change for this market to take off is these apps need to be dead simple to use, like people have come to expect a level of UX on internet applications that they're unwilling to give up, and so signing into an app needs to be as easy as you know signing up with an email or connecting your Google account or you know whatever. Whatever you're comfortable with purchasing assets in the app, it needs to work with with Fiat payment methods, at least initially, because the process of getting token assets in the first place is too complex. You know this.

Speaker 3: 9:31

This UX interrupts every time you want to take an on chain action can be quite overbearing, and so, you know, in some applications it doesn't make sense to be as heavy handed and you need a lighter touch approach, or at least one that makes more sense in the context of the app you're trying to build. And so what we try and solve with privy is allow developers to build the UX that consumers have come to expect, you know, without sacrificing the things that make web three special. That's one big thing. The other big thing is, you know, we need to see more applications like courtyard, where you know it's built on web three rails, unlocking some of the unique benefits that web three enables without, um sorry, while still being intrinsically valuable for the user. So those are the two core things we see.

Speaker 4: 10:30

Yeah, it's a great way to put it, because I recently had a situation with a friend of mine. He sold me some sneakers. He couldn't wear them and I like them. And he was like, okay, I'll give them to you. And I was like, no, but I'll pay you something and he's not into crypto. And so I told him all I've been telling you to get into this for a while, so I will just create a wallet for you in your phone and I will send you some stablecoin.

Speaker 4: 10:57

I did it, and then my concern when I was leaving him was okay, is he ever going to open that wallet again to use it anywhere? So it was simple enough to create the wallet, but then, of course, it's the second problem that you were referring to. Okay, what else is possible to do once you've made it there? Well, you've talked a bit about how Previ is trying to solve this, but before this call, I was talking about Previ with Nick and he was talking about a few things that you are working on, like embedded wallets and something called multi-party computation. I have no idea what it is. If you could maybe say a few words about that and maybe we can get into it.

Speaker 3: 11:49

Yeah.

Speaker 2: 11:50

Well, and maybe going one step back before that, max, I'd love just your tell us what Previ is for listeners that aren't familiar. I think let's start there and then let's dig into some of the behind the scenes stuff.

Speaker 3: 12:01

That sounds like a great idea. So the way to think about Previ is we are the easiest way for web three developers developers building on blockchains to onboard any user to their app. So that ranges from your web three newcomer who's never heard of crypto before won't go through the hoops that we've been talking about. We make it really easy for them to sign in with email, social login, SMS and get a fully self-custodial wallet under the hood and embedded wallet and we'll go into that in a bit. Then, on the other end of the spectrum, if you want to serve web three natives, who often prefer to sign in with their existing wallets, we make it really easy for them to sign in. We have integrations with all the popular wallets and allow users to do things like sign in with a wallet seamlessly on mobile or connect multiple wallets to one account, which is something power users often want to do. So Previ is one library, one tool. You integrate us once and you can onboard anyone to your app, regardless of where they are in their web three journey. So before-.

Speaker 2: 13:08

And you guys are aimed at developer audience, right.

Speaker 3: 13:10

Exactly so. If you're building an app, you will use Previ software to power your user onboarding flow.

Speaker 2: 13:19

Great. I'm assuming that under the hood then there's branding ability. Like you can make this feel like your own app.

Speaker 3: 13:27

Exactly, yeah, so you can deeply configure the Previ experience to look and feel native to your app. So, everything from picking which sign-in methods you want to support to fully customizing the UIs of wallet message confirmations, to changing the background color, CSS customization, we want to make it so that the onboarding flow, which is your opportunity to make first impression with your user, feels delightful and native to the experience you're trying to craft.

Speaker 2: 14:08

Awesome. So you guys are building this super powered library and toolkit for developers to be able to create these really easy login experiences, but there's some interesting tech under the hood, so I want to go back to the multi-party computation as well as the embedded wallet piece of things. So tell us a little bit more about that and help me explain these ideas to my mom Totally, or to me.

Speaker 3: 14:28

Yeah, so one of the most important principles in crypto a reason why many of us, myself included, are in this space is this idea of self-custody and user control. So when a user signs in with email or social login and gets a Previ-invetted wallet, under the hood, that Previ-invetted wallet is a self-custodial wallet, and what that means is neither Previ nor the developer has the ability to do anything with the wallet, whether that's sending assets places or signing messages, without the user initiating that action. So the user is the only player in the system that has an ability to control the wallet, and we use something called Shamir Secret Sharing, which is a cryptography approach that I'm not going to go super deep on, but I'll explain how it works in order to make the user control as seamless as possible. So today, if you want a fully self-custodial wallet, you need to download a MetaMask, memorize a seed phrase, sign messages that look like they're written in foreign languages like just a lot of clunkiness that most people aren't willing to go through and using what's called Shamir Secret Sharing, we basically split the user's private key, and the private key is what's needed to control the wallet. There's an expression in crypto not your keys, not your crypto. What we do is we split the private key into three pieces, and you need two out of the three pieces to do anything with the wallet.

Speaker 3: 16:15

It's a pretty awesome scheme, and the systems are just starting to get mature enough to allow experiences like this, and basically, the user has one of those key shares on their device, and so if you're trying to use the wallet with a device that isn't the device that the user created the wallet on, it's very hard to do. I could double click on how we do it securely, if you're interested, but that's like a really important piece of the architecture is, you know you need to control the device that is using the wallet. The second share is controlled by privy, but it's gated on whether the user is properly signed into the app, and so in the status quo case, the user needs to be signed in on the app with the device they use to create the wallet in order to use it, and so that's that's a pretty high level view of how things work, and basically, if the user wants to use it, if I can ask you, Sorry, good, just to dig into that for a second.

Speaker 2: 17:21

So conceptually is this a little bit similar to like two factor authentication.

Speaker 3: 17:27

Exactly, yeah, it is, and OK, that's. That's a great way to think about it. Like you need to prove that you're signing in with your phone that you usually sign into your bank account with in order to access your bank account. It's a. It's a pretty good analogy, yeah.

Speaker 2: 17:47

OK, that's great. And then tell us a little bit more about the embedded wallet side, because I think that's really interesting as well.

Speaker 3: 17:53

Yeah, so when you sign in with email or social login, you get a privy embedded wallet under the hood. The key that controls that wallet is split, using what we just talked about, and then the wallet is. It's a part of the app experience so you, as the developer, can really craft how the wallet gets surfaced and what interactions you know the user and the wallet have in the context of your app. So you could frame it like you know it's a vault where you keep your collectible items that you earn as a part of a game that you're building. You could call it a wallet and expose like a lot more of the web three guts, if that's. You know what you're trying to do with your app experience. You really get to craft, like how this wallet is messaged.

Speaker 3: 18:42

And one of the most important parts about how we design the wallet is it's compatible with this standard called EIP 1193. Developers use that standard to control external wallets in their apps, and so the embedded wallet for the developer works the exact same way as an external wallet works. So you don't have to branch in your code base to say, ok, if this is a newcomer user, treat them this way. If this is a native user. Treat them this way. A big part of the privy value prop is a user is a user regardless of where they're coming from, and you don't have to branch in your code to treat them differently.

Speaker 4: 19:21

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

Speaker 1: 19:25

This podcast is brought to you by Step 3, an engagement marketing platform that helps brands build deeper customer relationships. Step 3 makes it easy to design custom branded membership programs that include rewards like exclusive content, vip event passes, merchandise discounts and more Unlock new revenue streams. It enhance customer lifetime value. With Step 3 is easy to use no code tools. Go to step 3.io to learn more.

Speaker 4: 19:59

OK, I got it, which I'm surprised I did, but no, it's really interesting the way you talked about the process and the goal of it all Because, as we're saying at the beginning, I think the main obstacle is making these things simple, and explanations or definitions like the one that Nick used sell it as if it's two factor authentication. It's easy for the user to understand, at the end of the day, what they want is to have access to their own assets and not rely on somebody else, even if they don't understand really the self custodial part that can be under the hood and listening to what you are accomplishing with privy, I see that some of the way we interact with the internet thanks to these technologies is probably going to change the way we use the web and the internet. So how do you think it's going to change it first, and do you think there's going to be something in the way we use the internet in the future that, when we look back, we think, well, that was obvious, it was going to be this way.

Speaker 3: 21:10

Yeah. So I keep going back to this money movement use case. We're going to look back and realize that merchants are getting paid instantly at the point of purchase and you're able to send a bank wire over the weekend or transfer, kind of make your rent payment over the weekend, and we're going to look back and remember a time when money just didn't move over the weekends and say, wow, look how far we've come. So that's a big one. But then this interoperability point I think is massive and underappreciated and it'll really take a few breakout apps to demonstrate its value Bye we, you know, imagining you sign into an app and because I'll give you a very concrete example a company we're really excited about is a company called Blackbird and they're powering a new restaurant loyalty application where when users show up to a restaurant, they like they tap their phone and then they earn points and they could redeem those points at any restaurant in the network for experiences like a free drink or access to a chef's table or earlier access to a reservation list. So it's like a Starbucks rewards, but it's powered across different restaurants, so it's not just a one to one system.

Speaker 3: 22:50

And imagining you are a big fan of Joe's Pizza in New York, which is my favorite slice of pizza. If either of you ever make your way to New York, you have to try it. You've been to Joe's Pizza 50 times and then you know Joe's wants to do a collaboration with the Jonas Brothers. I'm just making things up and you sign in with your wallet to a ticketing platform and because you've been to Joe's Pizza 50 times, you're able to buy Jonas Brothers concert tickets for half the price. These sorts of like cross-platform experiences that an interoperable system unlocks are unique, game-changing. They allow you to like bootstrap network effects. You know the moment your users sign in and it'll really take, you know platforms like Blackbird to blow up and go mainstream and once a few of these are live and your credentials from one app immediately show up and supercharge your experiences in other apps is we're going to look back on the very one to one nature of app experiences and say how lucky are we that we upgraded our system.

Speaker 2: 24:09

I completely agree and I think you know we're highly underestimating the lack of interoperability right now. I think that, just like apps and smartphones, in the beginning we thought what would I ever use this app for? What would I possibly need an app to do X, y or Z? And fast forward 15 years and there are hundreds of thousands, if not millions, of apps out there that have unlocked this whole new world for us. One thing we like to kind of close out with is just getting your perspective on how you see the best path for teams to get started in a space. So you're working with customers that may or may not have web three backgrounds. They have different types of technology stack that are more web two native. Where do you recommend that people get started in terms of thinking about developing a web three application? Obviously, privy is a great start, but what's your, what's your thought there?

Speaker 3: 25:03

Yeah, there are a lot of good resources out there. So there are in no particular order. There are communities of developers that one of the best things about web three is how collaborative the space is and how excited people are to help you get started, how high energy and communal this ecosystem is. So I'd highly recommend signing up for forecaster. It's a web three community forum, a web three Twitter, where people are posting questions all the time and you'd be shocked how excited the ecosystem is to help out people who are just getting started. So that's a no brainer setting up an account there, starting engaging, asking questions, participating in the community. And there are resources like the Alchemy App Store. Alchemy is one of the bigger software providers for the market and they have an app store where you can learn about all of the different parts of the tech stack and their perspective on how tools differ from one another, and that's a great way to bootstrap your tech stack.

Speaker 3: 26:20

There are podcasts out there. We really like Cina's Unchained podcast. I don't know if you all have come across that one. There's the step three podcast. I hear that one's pretty good too, and there's great content out there to learn about different tools. So, yeah, I mean there's a lot of resources out there. I think, a great place to start as forecaster, because that's where I discover most of my great stuff.

Speaker 2: 26:49

Amazing Max. Thanks so much for joining us today. Where can people go to find out more about you and more about what you're building? It pretty.

Speaker 3: 26:56

Yeah, we're privyio, privyio and privyio on Twitter and on forecaster, so we've posed a lot of our content there. Segal, underscore, max. My Twitter and forecaster accounts are basically just a feed of privy updates, so that's a pretty easy way to stay on top of everything that's happening as well. Awesome.

Speaker 4: 27:22

If I may, I have a couple of parting thoughts, because I was thinking about it, I have to say. But just your career and the way you explain how this industry is going to evolve, I think they're very similar because you also came from finance and then you got into tech and I think in crypto, NFTs and all this, I think the same happened Initially. All this interoperability happened with DeFi and then it moved two companies to brands and I think we're going to see exactly what happened with your evolution also in the industry. Yes, Thank you very much. I just have to say that and looking forward to seeing what else comes from privy. Thanks.

Speaker 3: 28:00

This is really fun. Thank you both. Thanks Max.

Speaker 1: 28:08

Thanks for listening to Marketing Needs, web 3. If you enjoyed today's episode, please like and subscribe in your favorite podcast app.