Steve Madincea: Digital Collectibles (Full Transcript)
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Ronen Ainbinder 0:04
I'm excited to introduce and welcome, our next official guest of the show. Today, joining the call from London in the UK is a sports marketing legend, and an enthusiastic tech entrepreneur. He's the managing partner of fantastic, a company that is inventing the future of fan engagement, using new and emerging technologies, such as blockchain, AI VR and many others. Our guest today is a prominent businessman, and we met through my weekly newsletter. He accepted my invitation to the show with zero hesitation, and I'm excited to have the chance to learn from him. Without further ado, ladies and gentlemen. Steve Madincea!
Steve Madincea 0:43
Ronen. Thank you very much. Great to be here. Great to be with a fellow enthusiast of sports and technology.
Ronen Ainbinder 0:50
It's my pleasure to host you Steve, and you know, I would love to start our discussion by talking about collectibles, in general, a few weeks ago, I wrote an article about the most expensive baseball card ever sold. One of the main things that I realized, is I haven't seen a collectible card for years. It feels like it's an industry that has been slowly fading away. Your company, Fantastec, seems to be about taking that industry and making it digital. I'd love to know the story of Fantastec. What is the purpose of the company, what is the pain point you're trying to solve?
Steve Madincea 1:25
The whole idea behind Fantastic, is that myself my partner Simon we just absolutely love sports. We love technology we work in our whole lives. And we recognize that the sports clubs were so busy putting together a winning team on the pitch, the technology companies were so busy building their technology, nobody was thinking about bringing the two together. So we're like, hey, we know this area, why don't we go for it. You know, it's a white space nobody else is in there. It's a classic startup type thing right you know you see something nobody else sees you just kind of dive right in there.
Without knowing any of the questions or quite frankly any of the answers, no type of thing. So, that that was the premise of fantastic knowing that many people around the world are just like me they love sports, but they're that close to the sports they love I mean I love everything from Australian rules football to American college football, to the big rugby matches, you know, have guys in the office trying to teach you about cricket, you know, but you can't be there all the time so how do you get more engaged with. And when you see technology and doing things in other industries so special so unique, you're like, you know what we got to do in sport, we have to make things happen in sport. So, we start creating a whole host of different products and showing them to different people. And we were very fortunate that early on we had some of the top European football clubs, European football leagues come into our office and I still remember one of the younger dev guys you know writes code all the time he's with us maybe six months and he's like, how that F did we get Real Madrid and our office today, like, what, what do you think I've been doing for the last 15 years yeah, I've been working closely with these guys on Champions League and other things so that you know one day came like calm they answered. And so that got them to look at our products and they said hey we like this, we understand this this one we might not have the rights to. And when we showed him our digital collectibles that we built on a blockchain. They all were like jeez, we need that we need that right now.
Like, they didn't understand the pain point they're talking about that time but it's really clear to us now is that they saw that 99% of their fans are absolutely never going to attend a match you know because they're building up this international fan base for 10 years they've been in a race to build up 100, million 200 million fans on Facebook, Instagram, Twitter now Tick Tock everything like that right. But those fans are, you know, they're just getting likes or just getting shares you know for lucky, but they're not really monetizing them so how can we monetize those fans, how can we get better engage with those fans, flip that coin. On the other side the fans are saying, I want to get closer to the team. I want more interaction I want more engagement and I'm willing to pay a little bit of money. So how can I do that? So when we showed them our digital collectibles, they're like, yes we own the rights to that content. If you guys know how to build it make this because it's a very sophisticated blockchain system. We do it. And once we showed him that a kid could trade with somebody in Tokyo or Toronto, as easy as they could standing right next to him in Mexico City or anywhere else. These guys were like, yep, we're in, we're in and they've been really good partners ever since, quite frankly. Ronen Ainbinder 4:29 Wow, that's "fantastec".
Steve Madincea 4:34
That's what we hope people say!
Ronen Ainbinder 4:36
It's the first thing that came to mind! I really can't wait to swap some digital cards with you, Steve. It sounds like you guys are being able to create a tool to even make us feel engaged with the teams even though we can't even see them right now, the circumstances of COVID. I'm really curious to learn about a little bit about the platform that you talk about which you say it's very complex. I want to know how fantastic is leveraging technology to connect between sports fans and digital collectibles.
Steve Madincea 5:07
You know the blockchain itself is a great tool and a great system and of course, everybody knows it because of crypto crypto cannot survive without the blockchain, but the blockchain can survive without crypto. So my partner and I, you know, long hours debating this over pints of beer at the local pub and stuff like that we finally decided that we were just going to go blockchain because we didn't think crypto was mainstream enough that the complication of having to have a wallet and open up a wallet and stuff for the mass audience wasn't the right thing right away so we, but we'd like to authenticity, the decentralized nature of the blockchain. We thought there were a lot of great positive things that we could do there in the fact that, you know, you could have a verifiable digital asset and trade it just as nicely with somebody anywhere around the world, and not get ripped off because they're trading you something back that you agree to as well. Right. So we really like that really understood that, you know, there's that old saying hire people smarter than you. I always tell the story my first blockchain meeting. Well people in the room, absolutely the dumbest guy in the room about blockchain.
But you keep learning, you keep asking questions you understand you got a business mind you dig into it further. Now I'm speaking of blockchain conferences around the world you know which is extraordinary in itself. And the real cool thing is once we get closer with the teams we started co creating some things with the players, the players understood this so we have different levels of cards different levels of collectibles. And some of the players actually do like your favorite tip trick or your favorite celebration after a goal. In the case of like missiles or with Arsenal did that with this the first year you know which really became hugely, hugely popular, or you have some of the women's players that you know they.
I remember one lady she told us, I do two things, I snowboard, and I play football. That's all I do. So is there anything I can do around snowboarding because she wanted her card to be unique and special, you know, and so nobody has this kind of like co created stuff with the players because the old school I'm sorry to call them paper card boards that are made somewhere centrally you know I gotta cut down trees, they got to ship it and, you know, polluting thick ways they get put in stores it's either on sale or return. But I will say one thing for him they did sell one yesterday that topped. Your, your most expensive card It's Mike trout rookie card went for 3.9 million US dollars.
Ronen Ainbinder 7:27
No way.
Steve Madincea 7:28
Just yesterday. Yeah,
Ronen Ainbinder 7:29
I guess I need to make a new article then!
Steve Madincea 7:34
I said to my guys when we saw that I said, look, I said we've got some one of the plays here was some digital signatures because I really think that's going to be something that's going to go for us quite strongly over the next 18 months where you know players, they have to protect themselves so they're not going to walk into an audience of people like they used to. And autograph shirts and books and hats and everything like that.
They just can't take that risk. And even if they thought about it or the team thought about I don't think their agent whatever let them do it, frankly. So we created these digital signature autographs where the player actually steps up to the screen signs his autograph or her autograph. And then it gets like kind of transferred onto their chest locked in timestamp authenticated right then in there. It's really cool and people know that that's a genuine autograph it's not a fake you know like this one.
It was Mike Trout, how do you know it's really his signature, you know, because Mike Trout is a decent guy, it is and stuff like that. But the one that he beat was Honus Wagner. How do you know Honus Wagner that was really his signature because that was sort of 1922, you know there, a lot of people had to say yeah it really was wink, wink you know before you ended up paying a couple of million for that.
So, we're, you know we're kind of really making it right now, all for the masses. I mean, we've got well over 185 countries, 10s of thousands of people trading digital collectibles, and it is really cool to make new friends because there's a networking aspect of it. I know people like certain people like different players and when you realize that and you come across when you trade it to them because you know that that's their special collection, other people like certain numbers, they trade it to them and stuff like that so we're really having a good time with it as we build it around the world.
Ronen Ainbinder 9:10
You know one of the things I really like about what you say is, how you approach the developing of a new app into a new terminology because even though you don't know it's it's all it's all about being less certain and having more inquiry, right, knowing how to ask the right questions and knowing where is the opportunity and how would you could you learn from it. So I think that's super interesting, and I love your your product is, I think it also comes at a great time because of how social interaction is limited. So, I think it's great I think it's it's "fantastec".
Steve Madincea 9:51
You're gonna be cursed with that word now I promise you!
Ronen Ainbinder 9:54
Given the level of competition in the market, I'm intrigued to know, what is the main line of business that Fantastec must win in, within the current business model to be successful.
Steve Madincea 10:06
There's a couple of hurdles right because we are actually a B2B2C. So we work with the teams or the leagues, to help them generate revenue from those hundreds of thousands, millions of fans that they've got around the world right, but they have so we have to pain that we have to solve with them the hurdles that we have to overcome from a business perspective is first to get them to understand the product. And sometimes there's an education process. Right, so sometimes the technology may be I don't want to say over their heads but it may be a bit complex and you have to show them and demonstrate to them how it works and how it can work for them.
Funny enough, the fans you know the first the first wave that come in, they're all the technology enthusiasts right they know blockchain they know everything you know VR ,AR, AI, ML you know they know all of the letters right they do it all. So they just come in because they think it's cool different interesting, and then they start sharing it with friends that maybe don't know technology as well. So it's kind of a two step cell, which is complexing right so first the teams have to be believers, because they're giving up certain things to go on your platform as far as content player time, you know rights free footage, things that they have and stuff like that and give you a great example of that working with Real Madrid who are simple partner, work with, they have you know some of the classic footage of all the time because they have Champions League Final footage. You may remember Gareth Bale's wonderful bicycle kick. Now, we have that as part of our collection people can take that on that trade that. It's really a hot item. And again, I'm not trying to make down on the other competitors that we have out there.
They've got a paper card, have a guy sitting there smiling from nine months ago, you know, so he's either put on weight or took off weight or added muscle or something. But he's changed for life, we've got that we've curated that moment in time, Gareth Bale does an incredible bicycle kick in the Champions League Final to win the trophy for Real Madrid, and you can have that in your wallet right and you're sorry on your phone, you can have that on your phone, you know, and that's the other cool thing is that so many people wrote to us and said they're joining our camp, because when they were literally conducted many cards or top cards and their mother threw out their card set, they're all upset with what they know now they can't keep it all on their phone, it's not going anywhere so they could just show their friends at the pub or they show somebody in the old days pre COVID, you know, at an airport or something, they would share that with them the different collections that they had and then bring them into the game. That's really how we've grown is word of mouth like.
Ronen Ainbinder 12:35
I also think that one, one key element of sports is its emotional part. That fans actually remember things because of the emotions that it caused them back in the time. So, I feel like by capturing the moment you also capture capture the emotion, which is something like when you sell emotion, everyone's going to buy. With with the current shift in how everything has been taken online; businesses, sports, technology, all that have been affected by all the things happening worldwide such as political changes, trade wars, and COVID of course. I'm intrigued to ask you, what are the top 3 to 5 macro trends, affecting your business environment, if you could be specific as possible, that would be great.
Steve Madincea 13:24
One thing is that we know absolutely positively for sure that mobile phone use is up right. So originally we had thought we were going to appeal to the mobile first generation, but with COVID coming onboard. It's actually a mobile first economy. Right. If you look at all the statistics people are going to their mobile phone first to do everything. Zoom calls, you know, ordering on Amazon, digital trading in Fantastec, you know, everything on that phone so it really truly is accelerated that mobile first economy. And that's, that's huge and it's also helpful to us because 85% of our fans are younger than 30 years old so we know that they're the mobile first generation anyway so that it's perfectly hand in glove with us.
But the other aspect that we have to think about in our ecosystem is, you know, when are those fans going to go back to the stadium what can they go back, you know there's tests with, you know, 10% of stadium other tests with 20% of the stadium. And so those fans are having like real withdrawal systems. So they need interaction. They need engagement. And that's why, you know I'm pushing my dev team really hard to come up with more games that people can play on our phones, digital collectibles more leaderboard competitions more, you know, different interactions like that so that people that are missing that kind of journey to the stadium and stuff because that two hours prior, and that two hours after was probably about our busiest time it was kind of a called "shoulder times," that's when we can see people just light up on our board that they just start trading all over the world because they. It's the build up to the game it's one of the things they want to do when they're double sprinting and stuff like that, you know, but probably the number one thing that you know is really a thing that we have to be careful of more than anything else I think is the differentiating ourselves from other people that are out there that have gone the crypto route. I have no issues with the crypto route I think it's a wonderful system and people should do it but there's a lot of. I like to call them crypto gamblers out there so I'll give you one prime example, F1 Delta time is a great game, wonderful game. And I'm very envious that they sold these crates of unknown stuff at the beginning of their journey. It was like over $350,000 worth of stuff that they sold $374,000 sites.
And I'm very envious of that but the more I looked into it, the more it looked like they did a very smart thing where they use a thing called "Alt-Coin". Just consider that like a currency converter. And so people with all of these digital crypto currencies around the world that were kind of useless. What are you gonna do with them, you know, you have to do something so they went bought this F1 Delta Time game because F1 is a big attraction.
So that's great for them they got some immediate cash. But the question is whether long term those people will be around and continue to be players and stuff. And so that's the balance with the the people that are in the market was a crypto formula right now have to figure out; how can they get something just in an immediate jolt of people trying to get rid of what I call the bad crypto coins into something that's a long term play. Little sophisticated I know but it's, it's, it's one of the things we have to challenge you said be specific and I was!
Ronen Ainbinder 16:29
That's actually fascinating i mean i think the world is changing so fast, and soon we're going to be facing more and more and more applications surrounding the blockchain so i think i think now's a great time because it's it's right around before it gets trendy, but it's still you know in the in its early days so I think it's a great time for you guys and I wish you guys have a tons of success. Steve, my last question for you is, a little bit of a more personal one that I like to ask on the show, but what what's your message to the world if you could have a billboard that would be seen by millions of people every day, what would you write on it, and, and why.
Steve Madincea 17:14
Well listen, if it's a billboard that's going to be seen by millions, then presumably, I don't know, most of these people, right. If I don't know most of these people then I have to assume they're like everybody else in the world that they have good days and they have bad days, you know, some might be struggling a little bit more than others, especially in this COVID era quite frankly. And whenever I get into that kind of thinking and or have helped out a friend that's been that kind of space or myself. I reach into my wallet, and I have a little card and some that wallet there is somebody gave me many many years ago, and it was quote by Ralph Waldo Emerson and I am not, you know, one of these people that I can quote Emerson left, right and center or anything like that, but he had this quote that said: "What lies behind you. And what lies in front of you, pales in comparison of what lies inside of you." It's really deep, you know, it really, it really hits the spot and I can't tell you how many times I've helped people out with that or it's helped me that if you're in a tough spot, you know, don't worry you'll get through it because you got the right character, you're the right type of person. You know, it's definitely helped us through this startup because a startup is like wow this roller coaster right here. But that quote from Emerson for me is probably the number one thing I probably put up on a billboard because it would help the millions that were going past it every single day.
Ronen Ainbinder 18:37
Wow that's that's deep as you say, I love that it's super special and I think that's a great place to wrap today's conversation. Steve, I'm grateful for having the chance to speak to such an icon of the industry, I'd like to thank you for your time, for your insights, from your kindness, and I hope we'll get the chance to interact in person sometime soon, but for now, thank you for coming to the Halftime Snacks!
Steve Madincea 18:59
That'd be awesome and I'm gonna have some halftime snacks.
I'll keep listening keep reading the newsletter. And if there's anything else I can do for you or want to use let me know.
Ronen Ainbinder 19:07
Thank you, Steve, I appreciate it.
Transcribed by Otter.