Elvin Zhang's Introduction
Elvin Zhang [LinkedIn | Facebook] is a Singapore-based polymath and startup founder with his interests ranging from Quantum Physics to Blockchain and Fintech. He, believe it or not, has also won an award for playing a unique Chinese musical instrument.
Elvin spoke at length on his multiple 6-figure startup exits, common startup mistakes, the right VC pitches, and blockchain technology.
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• why Elvin rejected UC Berkley after receiving rejections from MIT, Stanford, and Harvard (and why he lied about it to his parents)
• Elvin’s first business in a $100 million Singaporean industry
• Elvin’s first startup exit (a 6-figure USD amount)
• How Toucan Pay came into being
• Why Peter Theil’s Zero to One concept means different things for different startups
• Things startup founders should keep in mind while making a pivot
• Mistakes made by Elvin in his previous startups
• The right way to pitch to VCs
• Elvin’s extensive insights into Blockchain Technology, and what this technology means for FinTech and other industries. Elvin shared in great detail why:
(i) decentralization is not necessarily required by most networks of today
(ii) how decentralization can help in a mature network by eliminating a central point of failure
(iii) Elvin’s personal three-pronged criteria for evaluating blockchain & ICO projects including:
(a) whether you really need a blockchain (i.e. decentralization) in the first place (this depends on the amount of mistrust in the current way of doing things)
(b) what type of decentralization is needed, and how much of decentralization? ?
For instance, Ethereum and Bitcoin can be accessed by anyone, whereas a consortium of banks may be on the other end of the spectrum with a closed and restricted blockchain network. All 3 forms of decentralization (public, hybrid, private) requires a different use case depending on the amount of privacy required.
(c) do you really need a new type of crypto-token (rather than using something like, say, the Ethereum token/platform)?
INTRO: (00:01) You're the average of the 5 podcast shows you listen to the most. Learn to run your business well with the SIA Business Show, where our host, Sayed Irfan Ajmal, interviews entrepreneurs, marketers, and speakers of all colors and creeds, revealing their biggest secrets and lousiest mistakes.
Irfan: (00:24) Hi listeners! Welcome to this next episode of the SIA Business Podcast Show. Today, we have a guest from Singapore. He is a serial entrepreneur and I came to know him via his Facebook updates, which are always very interesting, very insightful and I could see that not only is he an ardent reader, but he also has a very curious mind and topics which are very diverse in nature from quantum physics to blockchain to Fintech and much more.
(00:54) Elvin Zang is someone who is interested in all of that. And today we are fortunate to have him on this show based on some of the basic research that I have done via the information available online, I can see that he has been a star performer in academics. He has had multiple startups.
(01:12) Like I said, he has I believe one, or more than one successful exits for his startups as well. And to top it off, he has also, I think, won an award for a relatively unknown Chinese musical instrument. Is that correct, Elvin?
Elvin Zang: (01:27) Yes, yes. It's called the Er-Hu.
Irfan: (01:30) Nice. So, welcome to the show, Elvin. So, you are based in Singapore, right?
Elvin: (01:35) Yes, I am. Most of the time, at least, for now.
Irfan: (01:38) Right. So, tell us a bit about your educational background and how you started, how you got interested in entrepreneurship. So, I'm talking about times when you probably didn't even know what a startup is. What was that Elvin like? How you shifted from being that Elvin to the Elvin that you are right now?
Elvin: (01:56) Well, I think... Okay, so I don't want to start off, like... you have a very high praise for me, but I'm honestly just a random dude who's just a little bit more curious about things that's happening around me. So, I'm not like spectacularly smart or anything.
(02:09) And I'll say, at school, I had to study really, really hard. So, I was from one of the top schools in Singapore for high school. It's called Hwa Chong Institution, and I had the chance to actually represent the school for a physics competition but it's only because I had good grades for physics.
(02:23) Which, actually to be honest, if you are okay like just average intelligence and you study hard enough, and be like, research a little bit of study methods, you can actually score good grades. But that competition was actually physics olymp... like a physics challenge that I supposed to represent the school.
(02:39) So, I remember very [inaudible] that I literally failed the competition so badly. So, me and another very, very good friend who's currently also in the blockchain space from another institution called Raffles, we failed so badly. And we are like, we got carried, the gamer term, we got carried by our two other friends who actually... they are like really, really smart high IQ guys.
(03:00) But the two of us are like, dude.. if you had just like, average IQ guys who just somehow managed to stick into the team and got this under our belt. So yeah, I just want to... that's how... from an IQ perspective, I don't deem myself as someone who has like alien, like Einstein-ish kind of IQ, but I guess, I spend most of my time just working hard.
(03:19) I guess it's part of the whole Chinese... so, I was born in China and my parents were very, very like tiger moms and tiger dads. So, it's like a ton of assessment books and just math, science, math, science. So, that really helps to be a little bit better in math and physics and sciencey stuff. And that's how I got, I guess, the scholarships and stuff. I'm just like everyone who's listening to this channel right now, I think.Irfan:
(03:43) I think, humility is definitely a good trait, but I'm sure that we all will be able to learn some really good stuff from you in this episode. So, you mentioned physics competitions. So, did you say that you are a group of 4 friends and 2 of you were basically helped by the other two friends in a sense to win that competition? Is that what you said?
Elvin: (04:00) Oh, no. Actually, it was a competition between Hwa Chong and Raffles and I had 2 friends, so that's 3 people on each team and he was on the raffles team and I was on the Hwa Chong team and we were, basically, not under-performing while the other two friends were like really, really good because it's a totally different level.
(04:16) It's not school stuff. It's like, things that are olympiad level, Physics Olympiad and stuff. So yeah, that was the case. Basically, two other friends for my side, from Hwa Chong, they are carried like, they over-performed to make up for our loss back then.
Irfan: (04:30) Right. Interesting. When was it that your family moved from China to Singapore? How long ago was that?Elvin:
(04:37) I came here around 5. So really, really just like 24 years ago. Yeah.
Irfan: (04:42) Right. So, you're pretty young when you moved doors. I guess, the shift was probably... you probably feel more Singaporean than Chinese, I guess, because you have most of your life in Singapore, right?
Elvin: (04:52) It's actually a bit of mix. So, I tend to tell my friends whenever we catch up, they have no idea that I was born in China because of how my Singapore accent comes out like now. Only when I speak Chinese toward Chinese Chinese. Then, now my accent in Chinese will come out. Yeah. So [inaudible], but anyway..
(05:08) So [inaudible] I think, I told them that I spend about 70% surfing Facebook and 30% surfing beaches. So, it's a very real mix. Yeah. You see, 70% of the time you see that the western media portray a really, really... this lens like, viewing the Chinese society towards this lens, and then the Chinese media, you think all of that and view the Western society through another Lens.
(05:31) So I guess, it shook my belief of system quite a lot whereby I was always trying to find this underlying principle, which also kind of contributed to why I try to seek answers in every single vertical, like physics, like philosophy and all this kind of stuff. I just got really curious of that. "Dude, this is so confusing. Why is this two sides telling me different stuff?" And I guess, that's how, yeah, it's like that's my kind of upbringing, I guess. Yeah.
Irfan: (05:56) Yeah. And I wouldn't want to speak too much about myself, but I find it very fortunate that I was able to spend a few years in Sweden and Denmark and most of the work that I do, despite living in Pakistan, geographically speaking, is with offshore clients.
(06:10) So I think, one of the biggest benefits, I think, that it has given me is to have an open mind and to question basically everything. Unfortunately, at least in our country, with the education system, and I think it's the same with probably most countries, unfortunately, because, with our education system, it's something that was created for factory workers of the industrial age who can just follow instruction. Yeah, exactly.
Elvin: (06:33) I agree.
Irfan: (06:33) And I assume, this is why... I mean, I really appreciate the fact that you mentioned how both sides, like the Western side and the Chinese side, has these specific lenses which might not be 100% correct or 100% incorrect. Both may have some plus and minuses and all that.
(06:49) And I think when we have the courage to really going into depths of both sides, we can be a more open-minded person and learn a lot from both sides, whichever sides they are.
Elvin: (06:59) Right. I totally agree. Yeah. It's a multifaceted society. I think, multifaceted earth, in fact, global society that we are living right now.Irfan: (07:07) Yeah, exactly. So after school, which university did you go into? I believe I saw something about you rejecting an American scholarship, I believe. So. Tell us a bit about that.
(07:16) Right. So, it wasn't an American scholarship. It was... so, I got accepted into UC Berkeley's. Okay, for the record, I got rejected by Harvard and Stanford. All right? So, MIT, Harvard, Stanford rejected me once, yeah, I thought we'd do it [inaudible] if I go there for something else.
(07:30) Right. So, I got accepted to Berkeley's and then there was a post... my junior college, this is JC preparation kind of program and I got a government scholarship it's a government institution in Singapore. And at the same time, I got this local university called NTU at Nanyang Technological University, I got a college scholarship from that, the local college scholarship.
(07:50) And so the government scholarship in Singapore has a bond scheme. So, it's if you [inaudible] this, you spend 6 years post-graduation working for the particular department or anyway as a [inaudible]. And I guess, most of my friends who scored like, who was high enough to score straight A's for A levels. They went overseas, they took scholarships.
(08:08) And I on the other hand, [inaudible] back sites or we were... It's always this thing called national service. It's like a mandatory conscription program in the Singapore military. And during the end of the first year, it's a two year program.
(08:21) End of the first year, things got really boring. And most of the "mil" guys, you stop teaching tuition, we start doing things outside of [the] army just to keep our brains alive. Because when you're [an] army, you kind of like, use more brawn than brains.
(08:32) So, I actually got involved with this scheme called multilevel marketing, the company was actually called Amway. So, is it pretty large? Like, second largest multilevel marketing MM company in the whole world. And my mentor, by that time, told me I'll be financially free and I read, Rich Dad Poor Dad, and other stuff, [inaudible] financially free before I graduate from university.
(08:51) So like, "Dude, you should take the scholarship, right? Why did you buy [inaudible] 6 years of your life if you want to be financially free?" And I was all about making money back then. As with all guys, I want to be a hotshot banker after school. And this is why I worked hard. I mean, money is everything.
(09:04) So, I believed him and I... it's very interesting how people can be actually... the salesman manager is very, very interesting. All right? And I believed him and I turned down the UC Berkeley offer with the 6 years bond scholarship and I actually took the local scholarship instead.
(09:20) Interestingly, I didn't actually tell my parents about it because my parents brought me from China to Singapore for me to go to the states or the UK. That was the sole reason why they gave up a good lifestyle in Beijing to move to Singapore.
(09:34) So obviously, I must be nuts to tell them that at that time. So I just said, "Ah, my grade is not good enough. Look at this, I got a rejection letter from Harvard. I got a rejection from Stafford. Okay. So, I didn't get any of all of this stuff and I'm going to NTU." So, it's a pretty good school. It's like "okay-ranked" for business school. Yeah. So, that's how I ended up like studying local. And I told my parents 10 years later at the age of 28, last year. Yeah. So yeah.
Irfan: (09:59) Did you had to spend a few nights being homeless after you told your parents?
Elvin: (10:04) Well, I was actually homeless quite a few times. Okay, I was not homeless, but I was like really quite [a] horrible-istic financial situation throughout the 10 years of entrepreneurship. It was nothing like my mentor promised. I was not financially free, but at that time, I was... I graduated, I was nowhere near, close. Right? And there was a lot of mistakes made along the way.
(10:23) But my parents were actually pretty understanding. They were like, actually, we've always wanted for you to do your own stuff. I guess, I just took that the wrong way because this is very very hard Asian parents, it's very unlike Western culture, Asian parents show their love in a very, very unique way. A very Asian way.
Irfan: (10:39) Yeah, that's true. And I don't have the courage to explain some of the lies I've told my parents. Not yet, but I can find a lot of similarities. It's very interesting, the way... like, you feel bad as well when you are lying but sometimes with the way our culture is.
(10:57) In Pakistan actually, it's not just the parents, it's even your uncles and aunts and elder cousins and younger cousins and everyone telling you what to do, not telling you, but basically, having a lot to say in whatever decisions you are making. So it can be very, very tough.
(11:13) Yeah, Interesting. So, right. But I think, Berkeley is definitely... would have been very good, but the 6 years bond agreement, which I believe is something similar to what we have in a few government organizations here in our country as well.
(11:27) So I think, spending 6 years of your life in that government organization, I would say, being a third party, with no stake in this, I would say, you're better off not going down that route because you might not have had all the mistakes, and all the adventures, and the lessons that you learned along the way in your 10 years entrepreneurial career, would you agree?
Elvin: (11:47) Yeah, I guess every road leads to Rome. So, it's Olivia... I'm a little bit more zen now because certain things happen in my life. But I do believe that actually having real life experience as young as possible, it's really, really important. Rather than trying to stick to the system.
(12:01) I will probably end up breaking my bond because if I went to Berkeley, it's the boom of sharing economy. It was exactly when Uber started, exactly when Airbnb started. So yeah, I'll probably be half flight, be really tempted to break the bond. Because essentially, breaking a promise as well. So either way, I guess, it's just, I guess, I'm just naturally more energetic as a person.
Irfan: (12:24) Right. So, the MLM experiment, how long did you do and when did you move on to the next venture? Which I think was Jobby.sg, if I'm correct?
Elvin: (12:33) Actually, no. So, the MLM actually lasted for two years, basically lost that means. I still have that account with me, so I still order sometimes. There were certain products, they are pretty okay as a retail consumer, but to me, in my opinion, not all the products apply to me.
(12:47) So, I'm still cosuming maybe once in a while. My family buy some things as well. I stopped actively networking after about two years in when I realized that it's just like something that is not my cup of tea anymore. Yeah. So, certian ideological differences with the team as well and I started my... so, during the MLM days, a good friend actually put me into [the] education business.
(13:10) So, that's how I got started in real ownership-based. I guess something I can call my own. So, I eventually joined him as a co-founder. He needs to... he was a Malaysian. He Initially used my name to register the company because he's in Singapore.
(13:22) He needed a Singapore name to register a company and I joined him after like, close to a year and we started building this thing called a tuition agency, which is kind of like a referral agent. It's like [an] HR recruitment agent, but specifically for [the] tuition industry.
(13:36) So, [the] tuition industry in Singapore is huge. Back then, I think, the main thing that the tuition industry relies on, tutor agents rely on, is actually building a website and then after that, you match deals between private tutors and private tuition seekers.
(13:50) So, the industry itself back then in 2000 and... I think, the [inaudible] in 2014, it was about like 800 million close to 900 million USD worth of private tuition going around. And we did okay-ish, we had 15,000, 16,000 tutors and that's our supply side.
(14:07) And on the demand side, we had... we basically made up, like on good months, is very seasonal, we bid about eight to 10 k a month, at the very, very good months. But for bad months, it's 1, 2 k kind of stuff. It was an okay side income for a student in school.
(14:20) And I guess, the electoral, the part-time job portal, where we eventually spun out off and we end up selling that for [an] undisclosed sum to another larger company. That was because it's logically right. If you have 15,000 people or 10,000 tutors, only 1000 of them or maybe 1,500, 15% of them probably get a tutor job. Right.
(14:41) The rest, remaining 85%, will probably have to wait or just like be part of your platform and not get a job. So we're just thinking like, "Dude, tutors don't really want to teach as a passion. Most of them are part-time university students just trying to make a living, trying to get some part-time income.
(14:56) So, why don't we let 85% of the people be able to get some income while waiting for a tutor job to come forth? So, that was the whole... I think, milking like we have a database. We try to milk all of them and we started this part job retail matching portal.
(15:10) So, that's a lot of F&B outlets and retail shops in Singapore, being a metropolitan city, and they require a lot of... the turnover rate is very, very high. So, there was this very glaring demand and supply side, that gap in the market. So, we tried to solve it.
Irfan: (15:28) Oh yeah, sorry. So what's F&B, what does it stand for?
Elvin: (15:31) Right. Food and Beverage. Food and Beverage industry. We tried to solve this demand and supply matching thing, information asymmetry gap. But we were students. I think both of us are still in school. I really already doing so many different things. And we already borderline passing our classes. So, I was not a very good student academically in [the] university already by then.
Irfan: (15:50) Would you sit on the backbenches?
Elvin: (15:52) Yeah, well actually, [inaudible] so out of school that much. So, I didn't actually show off... like, 50% of the time I was [inaudible] class. So, my project mates, yeah. And if any of my projects is [inaudible] right now. Yeah. So, I was hustling outside. [inaudible] detention centers.
(16:06) But I guess, we just couldn't run 2 businesses at that same time and at the same time try to do... try to be a good student in school. And I think, it was towards the latter part of [the] university that we really had to pass our papers. So, you're not going to graduate.
(16:19) So like, okay, we could... we don't have the time to sign up. We have [an] auto demand site, 15,000 tutors, 15,000 part timers, but we have not enough restaurants and not enough retail outlest who actually wanted to hire people. We had to sign them up one by one. So, there was a huge clash. We end up having a fluke acquisition to some guy who actually had access to these people.
Irfan: (16:39) So, what you're saying is that if I could summarize that, that you guys started the tuition portal where basically you guys are the marketplace, in a sense, for the tutors and the students. And you had 15,000 tutors, more or less, but you realized a need of these tutors, and you realize that 85% of them don't get a job on your portal or your marketplace, and you came up with the Jobby.sg, which would help them to get part-time jobs in local restaurants and cafes and stuff. Is that correct?
Elvin: (17:09) Yeah, that's right.
Irfan: (17:10) Right. And so, what you're saying is that once you developed the platform, you realized that having the restaurants and cafes on board was a challenge. And so what you guys did was to be sold for an undisclosed, someone who had that kind of access, right?
Elvin: (17:25) Yes, correct.
Irfan: (17:26) Right. And I know, you had mentioned some information with me regarding confidentiality agreements and all that, but if you can give us, the listeners any rough idea, like in terms of, whether it was a six-figure amount or whatever for this exit, that would be, I think, very inspirational for them.
Elvin: (17:43) Yup. It was an okay, 6 digit... 6 figure amount. Yeah.
Irfan: (17:47) Okay. Wonderful. And exit was in 2014 is that correct?
Elvin: (17:52) Late 2013 to early 2014, it was finalized. Yup.
Irfan: (17:56) Right. And so, what came next? Was Token Pay the next startup that you worked on?
Elvin: (18:02) Actually, no, Token Pay is the most recent [inaudible] startup attempt. Before that, I think, we tried to continue doing on a tuition path, but then we had a variation of a more technologically driven tuition portal, but that crashed and burned. We actually took venture money for the first time from a very good early-stage seed funds called Crystal Horse Investments... Crystal Horse Investments.
Irfan: (18:26) Creston Hoss?
Elvin: (18:26) Crystal. Like, crystal, jade, crystal. Crystal Horse Investments.
Irfan: (18:31) Right.
Elvin: (18:31) Yeah. So, we took a grant along with us, a little bit of seed funding from Crystal Horse Investments to... so, I guess that's my first time taking in external money. And that whole thing crashed and burned. I thought I knew enough about business building. It's just, you can never know enough. So, that chrashed and burned.
(18:48) Then after that, I felt quite bad. So, that was the bit, I think, we returned the money back to our investors. So, even up to today, I'm still pretty good friends with the partner, the former partner of Crystal Horse Investments was the... his name is Chun. So, we still to call each other and still talk to each other and discuss stuff.
Irfan: (19:04) So, one question regarding this VC funding that you mentioned. I don't have a lot of experience with startups. I had been a co-founder for one startup for a little more than a year, but I have no idea about VC funding. And definitely you have been on both sides of the VC game, mostly on the startup side.
(19:22) But if you got this funding, I mean, you must have had to give up some equity if I understand. So, why did you have to return that fund? I mean, isn't that like, something which is understood by both sides, that the company which is giving you the funds and, you guys, that it can all lead to "no income" or it can lead to a lot of income and valuation. Do you know what I mean?
Elvin: (19:44) Yes. That's actually a very good point. So, I think that goes down to the legality of which. Actually, honestly speaking, I actually don't remember exactly what the contract was, so that's how bad I was back then. I think the contract was, they were a common shareholder, but it's like a different common share.
(19:59) So I think, that was a legality, but I might be wrong. But I think, at a part-time, the main thing is that I actually learned from that experience that trust and relationship is always more valuable than just a couple of hundred thousand bucks.
(20:13) So, let me qualify that statement. Right. I mean, I didn't return like... you have to return not much of money, but I guess it's more like, it's other people's money ultimately. Yeah, sure, the guy took a risk.
Irfan: (20:25) Yeah. Would you say that morally, you'd feel more at peace if you return it because you felt morally responsible for it, even if it was not a legal clause in a sense?
Elvin: (20:36) Yes. Yeah. In essence, it's that... yeah.
Irfan: (20:38) Yup. Got It. That makes sense and definitely something that is appreciated. So, if you don't mind sharing, what were some of the mistakes that you made in that startup, which, if you can go back today you would say, "Okay, this is something I did bad," or anything that maybe you did.
(20:53) So I mean, there can be things which a startup founder and entrepreneur might ignore and then there may be some things which he might overdo, right? So, if you can give an example of both in terms of this startup or any other startup that you've run.
Elvin: (21:06) Right. I think, the most recent example, Toucan is the best example, because I made a shit ton of mistakes, then even. So, I started Toucan, it was 2015 December. It was actually a B2C startup. The first learning point was that, do not pivot to enterprise startup unless you really know what you're doing.
(21:23) Don't get driven by revenue or promised revenue just because it seems ready to get. But every single pivot, either early-stage or start phase is very, very expensive. In what sense? Monetary-wise you have to build an entirely new stack and at the same time your morale of the team, which is [the] intangible value that you lose, it's huge.
(21:42) Because as a business founder, I'm a business founder, so I'm always in-charge of product and stuff. It's very hard to... there's always this gap. There's always this mismatch of expectations between the tech team and the business team. And as business founders, we always underestimate how much effort it takes the tech site to actually build something.
(22:03) It might be just like, "Hey, this is just one simple logical feature. That feature for it to work properly, it takes a long time to actually, for the tech team to build, even a competent one. So I guess, you lose two things, right? One is money, a lot of money and a lot of wasted time, of which time, you see, we're [a] much more valuable resource at the early stage than actual money. Valued time, money, as well as morale.
(22:25) So, these 3 things are the only things that an early-stage startup have and one pivot, if you actually, pivot wrongly, you will actually screw it up. So what happened was that we actually went from business to consumer, from B2C startup, which is doing a payments lending to overseas Filipino workers and also Filipinos in Manila in the Philippines to actually serving Filipino lending through an enterprise lender.
(22:49) So, the enterprise lender actually had like 5,000 initial pilots up to 50,000 full customer base wanting to use our services. So, we try to go for a large, large contract like a baseball swing, kind of a movement. But I guess, a baseball swing movement really isn't a startup play.
(23:06) A baseball swing is a play of Google, Amazon, Apple who has like a [inaudible]. They have a shit ton of resources, right? A lot of time, a lot of money, and a lot of people who are very, very stable. But you do not have that kind of resource. So, you do not take baseball swings as a startup. That was my key takeaway.
(23:24) So, don't pivot into a baseball swing kind of model. Before your pivot always think through it and understand fully. The other thing was that because it wasn't lending space... so, lending and payments are fin-tech space. It's extremely regulated space. Very, very hard to navigate.
(23:39) It doesn't really matter how good your product is. It doesn't even matter if you have soft oil demands side issues. You can have like, people lining up for your product and service but if you cannot deploy it in a legal manner, there's no way that you can get to the next milestone.
(23:54) So I think, I underestimated that drastically. I thought that demand... "Let's, just do this." Uber had demand. Uber, in San Francisco on it's Right Hailing Law and does a rent through, right? Yeah. So, every startup is very different and I think, there in the Philippines, which is a developing country, it's very, very different. It's not really... the power and the regulations is a very different thing from San Francisco. So, geographical regions and all these cost variables come into play.
(24:20) So I guess, I can go on and on and on about other different mere learnings, but I guess, the main thing that I learned was that, do not change your path just to make baseball swings or promised baseball swings. If you want to make a baseball swing, sure. Right? Like, a home run kind of swing, make sure that person pays your first, get cash in the bank. Survive as a startup.
Irfan: (24:42) Yeah. These are some really good points and makes total sense to me. So for instance, sometimes I would come across a friend who would try to make that home run or a huge baseball swing. And what happens is that they would depend on just that one big shot, a big deal or something. And then what happens is that they would get discouraged and it won't work out.
(25:02) Or even at times, if it works out, what happens is that they would get so much dependent on that large project or something, then they would forget to do the usual day to day stuff, in a sense. And this for example, sometimes some of them would come to me and they will be like, "Okay, you're doing very slow," or "You're not expanding," or something.
(25:21) But I have realized that maybe sometimes I get too complacent as well. Obviously, it's a kind of balance that you have to work on every day. Right? It's not like I would decide today that, "Okay, I will continue my business at such and such speed and then I will continue." It's a day to day struggle. Right? But overall, when I see and compare myself with them, I can see that... it's that example of slow and steady wins the race. Right?
Elvin: (25:44) Right.
Irfan: (25:45) Yeah. And with regards to regulations, like you mentioned how not all startups can be the same and I really love the example that you mentioned that with Uber or some of the startups from the West, for example. Them bypassing some laws or something like that, some sort of regulations. But definitely, they're in a very different market.
(26:03) And even in that market in the US market, San Francisco, the speed of innovation and that mindset that the investors, and the regulators, and the government, and all the organizations might have would be very different than a developing country like [the] Philippines or any others. So, that's a very good important point as well.
(26:21) So, would you say that, for a startup based in Asia, in Southeast Asia, in Singapore or in South Asia, they have to... we should listen to the advice given to us by, say, Peter Teal, I know he's your favorite, his book is your favorite. I saw it. Do you think that we should listen to it but then customize it according to our own situations and challenges and all that?
Elvin: (26:43) Yeah, definitely. I think, his concept of 0 to 1 applies to a lot of situations. In fact, our situations, but 0 to 1, what the definition of 1 in Southeast Asia is very different from what the definition is of 1 in San Francisco, in Beijing, in Israel, in Europe. Right? So, it's very, very different. Or in Africa. Yeah. So, when the concept is the same, I guess, the context is different.
Irfan: (27:07) Definitely. That makes total sense. So, you did mention a little bit about Token Pay. Can you go in a little bit more detail? Like, what was it originally conceived as and what were some of the changes that you guys made into the platform, into the app?
Elvin: (27:22) Right. Token Pay was originally, the most basic version, was actually selling prepaid load on credit to overseas Filipino maids in Singapore. So, that was like version 0.1
Irfan: (27:35) Right. So, like a virtual credit card?
Elvin: (27:37) Yeah, it's kind of like a virtual credit card. But the only thing that the virtual credit card supported was, literally, airtime and eLoad, prepay load.
Irfan: (27:45) So you're saying, these are the things that Token Pay supported initially, or are you saying, other virtual credit cards supported these things, initially?
Elvin: (27:53) Sorry, I didn't get that.
Irfan: (27:53) So, are you saying that Token Pay when it was launched, it was supporting airtime and the other feature you mentioned, or are you saying that the competitors were offering just these services, and you guys were bringing much more than that?
Elvin: (28:04) No. Actually, for Singapore where we launched, I think, we were the only one providing credit top-up to airtime. As far as we know. So, everybody else, that model... it was like, you can do electronic top-up but you have to top up your wallet first.
(28:17) So for our case, it doesn't make sense because in Singapore if you want to top up wallet for maids who do not have access to bank accounts, like overseas Filipino workers who do have bank accounts, they literally have to pass cash to over the counter, which essentially they step out of the house.
(28:30) If they step out of the house, that defeats the whole point of electronic top-up, which means that you have top-up at the comfort of your own home without leaving your house. So, we had to enable the credit card-ish kind of function in order for them to reduce the time wastage to step out of house or sometimes the employers don't allow them to go out.
Irfan: (28:47) Like for instance, if I am living in Singapore and I don't have banking facilities and all that and I'm not very may be educated and all that. I don't have a bank account. So, if I was using Token Pay at that time, in that version of Token Pay, what happens after one month after I use it. I still have to go to a shop to pay up the amount. So, is it like I pay all the amount at the same time? Is that what it is?
Elvin: (29:09) You can actually roll your credit. So, that becomes the pure credit card model. So you can, there's the full sum, you can adjust a minimum payment. So, you just pay whatever you want. As long as you meet the minimum payment, then your account is fine. If you don't make any payment, then, of course, your account is locked and there's this call collection process, just like a credit card company.
Irfan: (29:28) Right. And if you can share if it's possible, any sort of numbers with regards to how many consumers were using it at its peak or anything like that.
Elvin: (29:37) Right. We had about a thousand plus customers, like when we decided to actually move towards the enterprise model. Yeah, the B2B model, B2B2C model actually. So, we had about a thousand plus overseas Filipino workers, as well as Filipinos in the Philippines using our service using this app to do credit top-up.
Irfan: (29:56) Right. So, Filipinos living in the Philippines, we're using it inside [the] Philippines to pay for online purchases and stuff. Was it doing the same thing for Filipinos living there as it was doing for Filipinos living in Singapore but just in [the] Philippines? Does that make sense?
Elvin: (30:12) Yeah. It's that same model. So, basically we just sought the telcos, to Filipino telcos and for Singapore site, it's Singapore telcos. And for [the] Philippines, I think, there are 1 or 2 more additional merchants. So, we enabled this manual purchasing kind of process where you basically tell us what you want to get by our chatbot and we will allow you to get from Shopee or Lazada.
(30:35) And they will have a whitelister account with Shopee or Lazada to actually help you purchase using our accounts and charge it to your bill. Does it make sense? Yeah. It's kind of a manual simulation, not really that user-friendly but it serves as an MVP enough to still solve, to still get people coming and referring people.
(30:55) So even until today, there's like, people... if you go to Token's Facebook page, even though the service is no longer... [The] Token is undergoing acquisition right now. So yeah, there's still people tell you, "Hey, I got a friend who told me about this like one year ago, can I avail?" So, this is not like, okay... I think that's the hardest moment for our founder, it's like, "Oh, I'm sorry you're not serving anymore. You have to wait for our restructuring to be finished."
Irfan: (31:17) Right. So you are saying that, correct me if I'm wrong, you guys are in discussions with regards to acquisition of Token Pay as well?
Elvin: (31:25) Yes, we are. We have currently 3 different buyers. Who's... yeah.
Irfan: (31:30) Right. Sounds good. Well, wish you good luck with that. And I hope, once you have done that acquisition, we can hopefully have you on the show again to tell us some of the non-confidential stuff about it.
Elvin: (31:42) So, fingers crossed.
Irfan: (31:44) And so, you have already answered my next question, which was basically about some of the challenges in Asian, Southeast Asian markets and you already mentioned some of the stuff that may be regulations and culture maybe are different.
(31:57) So, as you guys have already made one exit and you mentioned that it was a 6 figure USD amount, US dollar amount. And you guys are in talks and have 3 bids, as you said, for your most recent startup Token Pay as well. So, do you have any advice for other startups on what they should be doing while pitching to a VC? And what are some of the mistakes that they can avoid, which you might have made or you might have seen other startups made?
Elvin: (32:24) Right. So I guess, I'll talk about this from a more founder's perspective because I mean we have a VC firm right now, but like, a senior partner with more experience will probably give you a much better understanding from the VC side of things. Right?
(32:37) So, from the founder's perspective, I think, it's... okay, it's really hard to just say it from the founder's perspective now that I know from the VC perspective a little bit. Anyway, I think, one of the main thing that comes to my mind is that, don't try to smoke things. Don't try to fluff things because [of] VCs, especially the more legit ones, which are the ones that you want to be part of a business, unless there's something wrong, right?
(32:59) You want a good VC to be a partner, especially at an early stage because it's like a marriage. So, you wouldn't want to hide things because good VCs will always know and always have known the questions to ask to call you a bluff.
(33:12) So, I guess from a founder's perspective, don't think that VCs are clueless. Most of the VCs, we've seen like, thousands of projects in the same vertical over the past years and it's our job. So, we see a lot of different kind of people. So, I guess that's one thing that I want to point out, which is, just don't try to sell too much, just present whatever information you have and it is okay to be rejected by VCs.
(33:35) It's okay to do what? Sorry.
(33:37) To be rejected by VCs. It's entirely okay. And it doesn't mean that you do not have a chance to that VC again. Right? As long as you are transparent, you have integrity. You're just sharing your business as it is, instead of trying to fluff up and get caught on your bluff.
(33:52) As long as the integrity component isn't compromised, a VC will always talk to the entrepreneur. Always a good VC. I mean, right, case in point, when I was in Toucan, I had a privilege to basically, the incubator kind of like... Being [a] resident startup at Vertex Ventures, which is actually the VC arm of Temasek, which is the firm I'm with right now.
Irfan: (34:13) Is it the same incubator called DBS, the one which is, I think, the incubation arm of a bank?
Elvin: (34:18) Yeah. That was a structure accelerator program for about 6 months. So, before and after 6 months, Vertex Ventures has been very, very kind to take us in for the resident startup program. So, I got to spend time with the managing partner and a partner may be bi-monthly or every 2, 3 months we'd catch up.
(34:36) And be... I just shared all the challenges, the troubles, the problems and they try as much as possible to help us. So, I think that's really invaluable in building trust because you don't hide your shortcomings as you pitch to a VC. A VC is meant to partner you, you drive the startup, we provide resources to partner you. So I guess, that was what Vertex Ventures did for me and that really shaped my view to what a good VC should be like.
Irfan: (35:02) Right. And you have mentioned, I can see that you are very good at approaching VCs and maybe angel investors and getting their attention, building relation. So, any tips on that? Like, how do you do it? Are there any sort of established formal channels of communication, or do you just walk in their office? How does it work? Any tips that you have in terms of your building relations, pitching ideas, getting their attention, anything like that.
Elvin: (35:26) Right. So I think, there are few parts to answering that question. One is that VCs run a very tight network, tenure investors, the more experienced ones, they share information a lot. So, just be really, really genuine. People who have made it. VCs, Angel Investors, one of the main thing that you want to do, apart from making a 1000 times return is to really help the next promising founder to solve a real good problem.
(35:51) And we share information, we genuinely want to help. So, genuine founders really have an advantage over founders who just try to sell too much. So, that's one. Of course, the definition of selling, in this case, where you talk to angel investors and VCs, I think, you should know your business as much as possible, as clear as possible so that you'd save their time. Right.
(36:15) So generally, respect for people, be genuine, and just be yourself. If you're not there yet, just admit it. Just acknowledge it. Thank you very much. Take the advice, go back, work hard. And then after that, go back to the person again.
(36:30) All this count for basic... I guess it's just basic like, you just like to work with [a] person like these. It doesn't really matter whatever the person is pitching or just like catching up. Someone like this... because let me... angel Investors... investors are just human, right? You just like to hang out with humans like this and genuinely want to help people like this.
Irfan: (36:46) Right. Makes Sense. So, let me ask a followup question to sort of come up to [a] more basic level. I'm sure it's a more basic level for you, but I'm sure some of the listeners may have this question or this sort of confusion. So, if I come to Singapore, And I don't have any startup ideas to pitch, but I'm just asking for the sake of listeners.
(37:04) So if I come over to Singapore, if I have an idea, just let's say, you might have an idea to pitch. And I have some customers, I have a platform ready, an MVP and all that and I want to pitch it to a VC. So, how do I go about it? Do I contact them via Linkedin, give them a brief piece of information about my idea and ask them to meet me on a cup of coffee, or do you advise something different?
Elvin: (37:27) So, I would say, VCs are a little bit later. By VCs, I think, the definition for my VC is an institutional investor. The angel investors, there's this network that is run by our very good friend and mentor of mine called Shawnee. She runs Angel Central, which is a network of angel investors. You can approach her. So, there are some key influencers at different stages of the business. So, I wouldn't recommend just going right to a VC unless you have a pretty solid idea of what you're doing or what you're going to launch.
Irfan: (37:56) So, let's say, some sort of an early, some sort of a fund or angel investment network, which is meant for, say, very early-stage startups.
Elvin: (38:04) Right. I think that, just google Angel Investors Singapore Association, there's BANSI, there's all kinds of association with regular schedules to uncover hidden gems. We've got ideas. Singapore is still pretty much a hot bid for startups and stuff.
Irfan: (38:18) Do you think that Singapore is like the Silicon Valley of Asia? Would you call it that?
Elvin: (38:24) I think, nowhere else can call themselves a silicon valley because it's really hard to duplicate Silicon Valley's culture in my opinion. It's a lot of different variables. Singapore is its own unique startup culture. But I guess, within Southeast Asian nations, just Southeast Asia as a region, Singapore is definitely the place to be for startups. Yeah.
Irfan: (38:42) Right. And what about entire Asia?
Elvin: (38:45) Entire Asia, actually that is Beijing, next Shenzhen. So, depends on what you want to do. Right? So, Singapore recently there's this whole buzz about cryptocurrency and blockchain. So I guess, Singapore is like the go-to place, it's not just in Asia but globally as well because of China's ban.
(39:00) And so Hong Kong, you don't have to go there, but Singapore it's kind of like, the right stepping stone between the Eastern Market and the Western markets because you have both English and Chinese speaking guys. So yeah. So [it] depends on what vertical you're in. I wouldn't say like... really depends on what we did create. Yeah.
(39:15) If you are in manufacturing, go to Shenzhen. Right? If you are in banking and finance for, say, corporate, personal finance, you can go to Hong Kong. Hong Kong for corporate and you can come to Singapore for Personal Fintech. So, it really depends on where you want to... what kind of business you want to do.
Irfan: (39:29) What do you mean by Personal Fintech, as in Consumer Fintech?
Elvin: (39:33) Consumer Fintech, right. Enterprise Fintech and Consumer Fintech. Yep.
Irfan: (39:36) Right. So, you already started to speak about blockchain and cryptocurrencies. I know you're very excited about it. I have been dabbling a little bit and learning more and more about it since, a year now. So, tell me why blockchain? Warren Buffett, he's recently mentioned... I probably shouldn't mention what he said or that might lead Bitcoin's price to go back to $9,000 or $8,000 again.
Elvin: (40:04) It's fine. It's fine.
Irfan: (40:04) No, I'm just joking. So, there are these 2 camps, the way I see it. And I know some of the stuff, but definitely you know more about it and some of the listeners will definitely learn from. So, why do we need blockchain? Why do we need decentralized networks?
Elvin: (40:19) Right. So, disclaimer, I'm not an expert, I think. I don't think, anyone can call themselves experts in blockchain, in this space. If they call themselves an expert, they are not experts. That's my personal opinion because it's turning so fast, right? Every single day there's so many different things.
(40:32) For me. The question of whether you need decentralization or no decentralization is, I'm actually a guy that's researching on blockchain and crypto thesis in Vertex Ventures and also a few sharing to a few other Temasek lead funds.
Irfan: (40:46) What's Temasek?
Elvin: (40:46) Temasek is the sovereign wealth fund of Singapore.
Irfan: (40:48) Right. And Vertex Ventures is a sort of a sister company of Temasek..
Elvin: (40:53) So, Temasek is one of our anchor LPs. Vertex Ventures is a network fund that manages 1.4 billion UM around the world. Temasek is the anchor's 50% of our current fund. On the holdings level, we are 100% subsidiary of the holdings level of Temasek.
Irfan: (41:07) All right. So, you said that you are the guy for Vertex Ventures, Temasek and some other organizations and you are doing... you are the research guy for them when it comes to blockchain, is that correct?
Elvin: (41:19) Yeah, I spend more time doing research, trying to exchange notes with the other people in other... Temasek is a massive [inaudible]. So, there are hundred people researching our blockchains. For Vertex Ventures, I'm the guy spending the most time right now, researching on possible crypto thesis and blockchain, looking at startup, what kind of products can we invest in?
(41:36) So, going back to your question, which is why do people need decentralization? The answer actually is, most people do not need decentralization right now. So, it also depends, right? No extra application in the world right now that can be entirely decentralized.
(41:50) So, if you look at CryptoKitties, right? You're a blockchain, there's no tokens whatsoever. So, no ICO stuff, but they're not decentralized, right? Because it's [a] decentralized record of data, of a unique virtual kitty, but it's still powered by centralized providers who provide the internet, the basic internet.
(42:09) So, if you shut off [the] internet, you can shut off CryptoKitties. So I guess, one of the most common misconceptions of people who stand firmly just for centralization or decentralization is that there is no absolute decentralization or centralization.
(42:24) It's just like depending on the circumstance of the particular network of people, decentralization helps a mature network to eliminate [the] central point of failure because it's decentralized, right? Even when one will hack one thing, you get a compromise, maybe 1, 10% of the network, but you can still... like, with 90% of the networks still being uncompromised, you can still continue performing whatever service or function that a network is supposed to perform. So, yes, there's some merit to decentralization.
(42:51) So, there's actually 3 questions that I can share, in a more generic manner to actually... this is my personal thesis for evaluating potential blockchain/ICO projects. So, more fundamental... so, speculative... this is not speculation, it's more fundamental analysis.
(43:07) First question is, whether you'll need a blockchain, in the first place or not, depends on the amount of mistrust in the current way of doing things, and the amount, the level of need that our network needs to reduce single point of failure.
(43:21) So, the more mistrust you have in your current way of doing things, the more blockchain can actually be applicable to your network. The more you need to reduce single point of failure, the more you can actually use a decentralized way of storing your data in as security and immutable fashion.
(43:38) The second question is, after you determine whether you need a blockchain, right? You need [a] certain level of decentralization. Then the question is about, what type and how much of this to decentralized. How much and what type is confused to be the same thing. Right?
(43:52) The type is basically like who can access it? Is it anyone? Is it a public network, like the Etherium or Bitcoin? Is it a hybrid one which is kind of like, your permission level. Some people have more permission than the others or is it like, a private or purely permission one like a consortium of banks whereby privacy is really important.
(44:11) So, all 3 forms, self-different use cases. That is a type of decentralization that you need. Then how much decentralization do you need is depending on... it's like, how many people do I need to make decisions to reach [an] agreement for me to agree or what kind of data is confirmed in this decentralized database? That answers [the] question of how many notes you need. Which effectively means, a participant that writes, that contributes to the data.
(44:38) And then the final question, which is..
Irfan: (44:40) So basically these notes would be the parties or the stakeholders who can approve or disapprove any type of transaction. Would that be it?
Elvin: (44:49) Yes. So, I wouldn't say approve or disapprove because the whole network approves or disapproves. So, the whole network reaches an agreement or no agreement. It's like, it has [a] voting system similar to that. The note, basically, suggests a vote. So it can contribute to what's writing onto the blockchain. Say that, "Hey, there are no contributes to validating data that is being written onto the blockchain."
(45:11) So, the third question is actually the most important question of all and most ICOs fail this, even if they answer question 1 and question 2. The third question is, do you really need a token in your network? Or can you, like CryptoKitties, that answers question 1 and 2 two, CryptoKitties doesn't have a token but is it decentralized? Yes, it is. The data of every single unit kitty is securely start and you can never go back in time. You cannot say that this kitty is yours just because your money finds certain ledger data, in the Etherium blockchain.
(45:43) Right? But it works. And I mean, it used to be crazy and it used to be one of the best applications that proved the, "Hey, blockchain has a real use case, to trace virtual objects on value or less perceived value. Right? Or scarcity. So do you really need to invent? To really not use Etherium, but a new type of token in your network?
(46:04) I think, the answer really depends on, they can only design. So, that here is a whole rabbit hole that you can go down. So, yeah. I think, those are the 3 fundamental questions. Do you need a blockchain? What is the nature of decentralization? And do really need a token in your network?
Irfan: (46:20) Right. If you still have some time, I would like to ask a couple of questions on this.
Elvin: (46:26) Yeah, sure.
Irfan: (46:27) Right. So, you mentioned how, with respect to [the] type of blockchains, you mentioned that there are 3 types of blockchains, right? One would be, something totally public like Bitcoin or Etherium. I believe, the third type that you mentioned, like a private consortium of banks. Would you say that Ripple would be an example of this? Like a total private consortium? If not, would Ripple fall under the second type that you said? Like, not very public but not very private either.
Elvin: (46:53) Right. So I think, Ripple is a very special case. Ripple has actually two products. The Ripple organization has the Ripple Coin, which is a public token. It can be traded at exchanges and Ripple has the RippleNet, which is essentially a newer decentralized version of [inaudible] banking system.
(47:12) So, the private permission one, whereby only banks can participate. And most of the partnerships that's being formed by Ripple is actually under RippleNet. There we can see how this whole mania happened, right? Where partnership announced for Ripple under RippleNet is being taken as... these banks actually want Ripple tokens. But actually there is a segregated difference. There might be some cross over here and there, but there is a segregate difference between these two product lines of Ripple.
Irfan: (47:40) Right. So, basically XRP that we see, right? That's the public coin and that's not the coin that RippleNet banks would be using. At least it's not a requirement for them at this point. Is that correct?
Elvin: (47:52) Yeah. You don't have to have Ripple coins to be part of RippleNet.
Irfan: (47:56) Right. And RippleNet, would you say that that's like an example of totally private type of blockchain?
Elvin: (48:02) Yeah, it's a good example. Yeah.
Irfan: (48:04) Right. And do you have an example of the second type of blockchain? So, you mentioned very private, very public, and then something which is a hybrid. So, I would love to have, if you know of any examples of a hybrid type of blockchain network or cryptocurrency, do you know of any?
Elvin: (48:19) Right. So, I think a hybrid just means that you actually use a mixture of public participation as well as publisher participation. Let me go to private first, right? Because it's much easier to give an example over there. R3 Corda, Corda by R3 is actually a publisher blockchain. IBM Hyperledger is a...
(48:35) Sorry, what's the first one?
(48:36) R3 Corda. R3 has an underlying blockchain. R3 is a consortium, so R3 has an underlying technology called Corda. It's a private permission blockchain, also there's a Quorum, which was developed by JP Morgan. There's IBM Hyperledger, and also Etherium has an enterprise version of it, which is a Permission Etherium Implementation.
Irfan: (48:57) Right. There is a Linux one as well. Where Linux is a partner as well. Is that Hyperledger, or Is that something different? The private blockchain consortium or something?
Elvin: (49:03) Yeah, I heard of the Linux one, but I'm not quite sure of the Linux implementation, but Hyperledger is actually a blockchain that's native to... it's developed by IBM. I can't remember the exact history. I think, it was some other company developed or some other association developed Hyperledger and then IBM took it into its cloud computing stack. What's the IBM one. I can't remember their name. It's IBM Blue Mix.
Irfan: (49:28) Right. Any examples of the hybrid type that come into mind? It's not necessary, I'm just curious.
Elvin: (49:35) Oh, that's a tough one. A good example of a hybrid.
Irfan: (49:39) I think, we can leave that question, but wouldn't you say that, some of the reports that mentioned that, even with regards to Bitcoin, I mean, there is, I think, like a group of 5 or so developers who get to decide what code gets written into the updated version of the Bitcoin client. Right? So, some critics say that they still have that power over what can or can't happen in terms of the features. Would you agree or is it something that I've maybe misunderstood, or something?
Elvin: (50:08) Wait, so this one is regarding Bitcoin or Bitcoin Cash.
Irfan: (50:11) No, Bitcoin. So, with Bitcoin, the BTC. I read an article, it's been a while since I read it that there are like 5 developers, right? Who get to decide what features will be written into the next version of the bitcoin client software. So, I mean, would you say that that makes it kind of a little less public, a little more private?
Elvin: (50:32) It's called the developer community. Actually, that's a question, not really on the type of blockchain, but that is the governor's model of the blockchain network. That's nothing to do with like... the nature of the note is decentralization. Yes, these will do decentralization based on a governor's model.
(50:49) So, the number of note decentralization in terms of how many notes and what is the type of notes, is just the participants and the participants in network might or might not, depending on a protocol, depending on the rules that used to run this network, can be part of the governing body or not.
(51:07) So, a good parallel is kind of a country, right? You have your participants, which can be a huge note. This note can be, let's say, Singapore Airlines. Let's say, let's just use Singapore as an example. This is Singapore, it's like... we have a Singapore blockchain, right?
(51:19) We have all this is databases, which is all the entities in Singapore and every single entity is like a note. At least the large entities are the note, right? So, there's a note called Syntel but who decides on the policies of how the network of Singapore behaves? So, that is decided by the governing bodies, which is the government. So there's a fundamental difference between the participant in the network and whether the participant is actually part of the governing body.
Irfan: (51:44) Right. So, you mentioned that while judging the viability of an ICO or if for instance, I am thinking of an idea, or if I am pitched an idea about a blockchain startup or something, there are 3 parameters and I will just repeat it just so that our listeners can better understand it. Number 1, is the type of blockchain, whether it's private or public or hybrid. The number 2 was, whether there is a lack of trust in the current centralized system. Is that correct?
Elvin: (52:14) Yeah. I think the number 1 question is to determine whether there is a huge lack of trust in the current system of doing things.
Irfan: (52:21) Right. And number 2 is the type of blockchain and the amount of decentralization. Is that what it is? The second one?
Elvin: (52:28) Yes. How many in those do you need to form [a] consensus, and what kind of people do we need to form consensus? Is it like, do we let the public come in or do we just let private publisher people to come in, or is it a mixture?
Irfan: (52:40) Right. And the third, I believe you mentioned whether there is a need for a token, right?
Elvin: (52:45) Yes. Whether there's a need for a token, needs to have users using, let's say, you guys raise using Bitcoin or you raise using Etherium, is there a need for you to create another token?
Irfan: (52:53) Right. So, if better you need to have something, a different token rather than the ERC 20 of Etherium or Bitcoin, right?
Elvin: (53:00) The ERC 20 is like, if you would say, I do quite say, Alvin coin, right?. Alvin coin, [the] token is Alvin coin, but ERC 20 its kind of like a standard. It is basically [a] mixed Alvin coin for few certain checklists on the Etherium, like a type. So that it's kind of, it can be inter-operable if another exchange or other people would choose to exchange with it.
Irfan: (53:21) Right. So, for example, if there is a totally new platform which wants to be a competitor of Etherium and it wants to, say, have interoperability with the Etherium as well, then it should have ERC 20 compatibility. Is that what you're saying?
Elvin: (53:36) A competitor of Etherium wants to, what?
Irfan: (53:38) So, if I want to come up with a platform which becomes a competitor of Etherium, for example, and I want interoperability with Etherium. So, what I will want to have is to have my tokens be ERC 20 compatible. Does it make sense?
Elvin: (53:53) Yeah. If you want to exchange with other ERC 20 tokens programmatically via smart contracts. But it depends on whether your counterparty enables that function. So, just because I have Alvin coin, which is ERC 20 compatible, basically just like ERC token, doesn't mean that you automatically get on Binance.
Irfan: (54:11) Yeah. I mean, definitely if you want to get your coin on any exchange, you do have to get their approval, right? I mean, it's not the case that you just mentioned, right? I mean it goes either way.
Elvin: (54:21) There's still [an] integration process in order for Binance to literally integrate you to the ERC token.
Irfan: (54:25) Right. And you also mentioned something very interesting, which I wanted to ask you about. You mentioned how... when I came across the CryptoKitty News, I was like, "Okay, this is just pure speculation and how people are maybe not wise enough to understand that this is not something which is going to be very beneficial.
(54:43) That was sort of my gut feeling and I didn't really read into it. But if I understand correctly, you are looking at it from a different perspective and it's very interesting. I would love to have you explain why you think CryptoKitty's example is significant.
Elvin: (54:56) Right. So I guess, CryptoKitties itself, it's... so, there's definitely a hype around CryptoKitties. But then again, aren't most art pieces hype?
Irfan: (55:06) Sorry, come again.
Elvin: (55:08) Aren't most art pieces hype?
Irfan: (55:10) Aren't most...
Elvin: (55:11) Like, "art pieces."
Irfan: (55:13) Yeah. Exactly. So, if, like that example, right? Like, when I started studying blockchain I, obviously, one of the authors was, we had a very interesting guest, I think it was Andreas Antonopoulos. I think, he wrote the Internet Of Money, and I think, Mastering Bitcoin, as well. I'm not sure if I'm remembering the right names, but I will add these in the show notes.
(55:31) So I think, what he mentioned was about [the] value of money. Like, we believe in the significance and value of a currency note just because it is something we can see and we can touch and we think that it's presumably backed by, or most definitely backed by our government.
(55:45) Even if we have examples like Venezuela or Greece or other countries where the countries may have defaulted and all that. And so, the thesis of the writer was that whatever the society or the majority feel has value... say, if they feel something has value, then it has value. It can be seashells, it can be currency notes, it can be a goat or something. That totally makes sense what you said.
Elvin: (56:10) So I guess, that's the underlying explanation for everything that humans may believe has value. As long as many people believe in it
Irfan: (56:17) Yeah. But I think, I mean, the reason I asked this question was not basically to have a critique on this from my end, but I think, I felt like you were talking about how the CryptoKitty's example maybe have inspiration for, say, games which would like to have their own, for example, currency. For example, if I am playing a video game and I get credits and I can sell them, I can buy more credits, something like that. Did I catch that correctly?
Elvin: (56:44) Right, correct. So, another part of me that... I used to be a competitive gamer for DOTA, Defense Of The Ancient, that is the game. So, I used to play well as well. So, there's all these unique items, but there's kind of like no way for you to... especially, let's say, if you get unique items out of the in-game environment and trade it on the open market, there's no way they can prevent anti-forgery or duplicates. You have no way of verifying whether this is a unique thing that actually past hand, actually transferred from this ownership to another ownership.
(57:13) So, blockchain, without a token a blockchain can basically do that because each phase has providence. As long as it's a digital product, once it enters the blockchain, it's traceable and it's kind of like unhackable by [inaudible]. I mean, can be compromised on the incentive level but on the pure security hash level, it's kind of pretty safe.
Irfan: (57:33) Yeah. Right. So, why the interest in blockchain? Are you thinking of doing something within that space apart from your work as a very new VC like you had mentioned previously, or you're just studying it as part of your job as a VC?
Elvin: (57:48) Well, it's funny you should ask because it was part of my job initially, right, joined Vertex because I was already looking to cryptocurrencies and ICOs and then after that, what happened to us is that, initially, I was like, "Oh my God, it's so much..." because it's a parallel universe. This is really counter-intuitive to understand and to absorb. It's not like... because it tenders the fundamentals of business, which is really weird. Right?
(58:11) So I guess over time, taking both sides because I have to do a bulk balanced view from an institutional investor point of view, I realized that blockchain has the ability to really shape the world. So, I'm a big subscriber to Andreessen Horowitz's Chris Dixon's Podcast series. I think he is...
Irfan: (58:28) Which podcast is that?
Elvin: (58:30) Chris Dixon's Podcast for the Cryptocannons by Andreessen Horowitz. So, Andreessen Horowitz and Fred Wilson from Uniscribe Ventures, they really helped shape my initial mental model for blockchain and what is its role in the economy moving forward in the next 10, 20, or 30 years.
(58:47) So I guess, the past 5,000 years [of] human civilization, in fact, we've all been focused entirely on scarcity. And blockchain is a technology improvement. It's a way of using technology in a way that... for the first time it changes how value is distributed on a very fundamental vehicle, which is the shareholding structure. Because shareholding structure by default was invented to go through sub-party and governments.
(59:15) In which [the] government is essentially a bunch of people who are [the] third party to verify trade and settlement of value between two willing parties. Right? And the blockchain actually passed this power back to the people. Of course, there are a lot of challenges, but I believe that the ultimate end, it will be such a case.
(59:32) This is my personal opinion. I don't represent Vertex in this, right? This is what I propose to Vertex as my personal opinion as well. So I think, AI, artificial intelligence, will actually drive value creation so much. General-purpose AI, especially, if it comes, when it comes, it will relieve both of us of jobs, which can be a scary thing, but when it comes, it's probably going to be a very natural thing.
(59:57) Most of us are not enjoying jobs and is something that can save us so much time, it's going to take over our jobs. Right? It can actually free up time for us to actually pursue what really makes us happy. So AI, as a super scaling value creator, IoT as a super scaling value capturer, who's convert offline value into digital value that can actually be traced, digital format. So, analog value into digital value. And then with blockchain as an equitable value distributor.
(01:00:30) It's probably the fundamental building blocks of, all us technologists, we term as the ultimate singularity. So of course, this is a crystal ball gazing. It's not going to come soon. I don't know when it'll come, right? It's a question of how fast or how slow.
(01:00:49) But look at all the creations, look at all the progress in AI, IoT, as well as blockchain. It just seems to be that way. And there are other books like Energy As Civilization, you can check it out on Guest Notes. As well as, we call it, The Enlightenment Now, which is a follow up to the Better Angels Of Our Nature, by Steven Pinker, Professor Steven. They all speak about this potential singularity thing in all different kinds of lenses.
(01:01:14) And I guess, technology has come to the point whereby, we no longer actually worry about scarcity, about resource allocation. Which actually brought us the topic of economics and shareholdings and company structure.
(01:01:26) So, we've moved beyond that, and we're at a part of time in history, and I'm hopeful because I don't want to be depressed. That's a... I can't let it be personal, yeah, I don't want to really be depressed. I want to be hopeful. Looking forward to the future, to the next day, by thinking that we are on the cusp of an exponential singularity growth in these 3 areas.
(01:01:44) AI, IoT as a value creator and capturer, a blockchain as the equitable value distributor where it can free people from the bottom-most layer, every single human being in this earth, part of the bottom-most layer of scarcity needs of the most bottom lowest layer of hierarchy and move upwards. So, I believe in that.
(01:02:04) I believe in these 3 interplayings and I believe that technology is, as well as family officers, large family officers are part of Nexus Global, which is [the] second or third generation of Impact Investment Association. So, Matt Rockefeller is one of the guys who actually anchors the fund along with [inaudible] Foundation.
(01:02:19) So, a lot of people around the globe who's waking up to this moment, and I want to be part of it. I'd love to lead it. There's no need to lead it because it's decentralization, right? And we can all be part of this and just bring happiness to the world instead of dwelling in scarcity.
Irfan: (01:02:36) Right. So, you touched upon quite a few interesting concepts in these last few minutes. What do you think happens when a lot of the people lose their jobs due to AI, and IoT? What happens next and how can they be ready for that shift?
Elvin: (01:02:55) Right. So I think, it's more of an education game than an actual implementation-execution game. So, [inaudible] itself, actually, to me personally, I feel, it's the foundation to the buzzword called Universal Basic Income, the UBI. That's made famous by Mr. Mark Zuckerberg, right?(
01:03:13) So I think, UBI requires a blockchain to actually implement so that it's devoid of human ego and selfishness, and it literally takes whatever value in this case, what value of value, in my opinion, is equivalent to time spent. If you look at... this is a little bit going beyond tech and a little bit more of a philosophical level because you have addressed an interest in that.
(01:03:37) So, even at what fuel value, right? The fundamental fear of all human beings is the fear of death. Every other fear, it's an extension or a derivative of the fear of death. If you read most of the religious scriptures, spiritual teachings, it all says about this thing.
(01:03:54) Philosophical arguments, it reaches this point. The underlying fear of humans is actually the fear of death. And what is actually the fear of death, right? The fear of death is actually the fear of running out of time because we do not know what's after death. Well, most of us do not know, right? Most of us don't know what's after death.
(01:04:15) So, it's the fear of the unknown. And we are actually afraid of running out of time. So, basically what money is actually a measure of value, is whatever you value the most, which is time. There's this famous saying in business, right? "You either save people time, or you save people money." Because if you save people money, people can use that money to buy other people's time so that they have more time to enjoy stuff to be happy. Right?
(01:04:42) And I think, it's a fundamental thing to remember that as we disrupt, there's AI, IoT and blockchain comes as this trio forces of disruption, we are disrupting the time wastage and we're not really disrupting jobs. Like, jobs are just a derivative as well. [The] job was invented as a means to centralize production for efficiency. And efficiency is an economic concept of scarcity allocation
(01:05:10) And if we have more than enough, enabled by our technological progress, to increase output of everything that we need to leave and to survive, basic necessities, why are we still allowing money, which is an instrument for allocating scarce resource to dictate our jobs, our perception of what it means to have a job, what it means to live day . This is no longer the case. Right?
(01:05:37) You are using something that's developed a few hundred years ago to run the current state of the world. Does that make sense? So, losing jobs, actually, it's not... I don't think it's something to be feared. If losing jobs is, actually in this case, [it] is analogous to having Universal Basic Income, a.k.a. "Financial Freedom."
Irfan: (01:05:59) Yeah. But I mean, both these things might not come at the same time. Right? So that's the issue that a lot of people who have... who are not entrepreneurs and who have jobs and they might be concerned about. And I do know that you are also... one of your recent peer Facebook posts, as I can see, it talks about finding meaningful work, rather than, quote-unquote, jobs. So, how do we make that switch from having no jobs to having Universal Basic Income and have a passion that we can pursue? Does it make sense?
Elvin: (01:06:28) Right. So, I'm trying to figure out the exact executional thing as well, which is kind of why I'm involved. So, to answer your question, back to the first question, because we can't take risk, is why I chose to be involved spending more time in blockchain? Because it's something that needs to be figured out.
(01:06:44) And I think, being part of, contributing to its formulation of something that can be understood and can be distributed to the masses, to educate people is something that brings meaning to what I spend my time working on.
(01:06:59) So, I'm trying to figure it out. If I figured it out... I welcome anyone to try to figure it out together with me. I'm looking for comrades, like companionship along this journey. There are a lot of people who are already working on this and we are actively trying to debate, argue and just try to figure something out, executional thing.
(01:07:15) We know where you'll end but we have no idea how... we have to figure our way out. That's how [a] human being is all this time, right? So I guess, that's the interesting part and that's why I'm in this space as well.
Irfan: (01:07:27) Yeah, definitely. I mean, that's a very interesting process to brainstorm and try to figure out a solution to a problem which can change the way millions or even billions of people live their lives. So Elvin, I know, it has been a very lengthy discussion, but I have really enjoyed our chat, and thank you so much.
Elvin: (01:07:45) Thank you so much too.
Irfan: (01:07:45) If you have any parting words, any final words, where people can find you? Please do let us know.
Elvin: (01:07:49) Sure. I think partly was, I still get a lot of work, so just feel free to reach me on Facebook, Linkedin, and I'll definitely get back to people who want to, who's interested, especially folks who actually want to work together to try to figure out a formula or size the shit out of how to make IoT, AI, and blockchain work together to drive towards that vision that we just spoke about.
Irfan: (01:08:09) Wonderful. Sounds good. We will definitely include your social media profile links, including Facebook and LinkedIn. Thank you so much, Elvin. It was really nice to have you, and I wish you good luck with your future endeavors.
Elvin: (01:08:21) Thank you so much for having me.
Irfan: (01:08:22) Welcome. Thank you.
Elvin: (01:08:23) Thank you so much.
OUTRO: (01:08:26) Thank you for listening. For show notes and other resources, please refer to the description of the show.