Toby Lewis - Co-founder, Reserve

Welcome to another Founder Wisdom pod. We have my friend Toby Lewis with us today. He's a co-founder at Reserve. It's a Bitcoin-backed lending enterprise. He's the host of Machine Money. I love the name. It's a great podcast, which I've been on. He's in London, England. He had an interesting career so far. I see journalist here, reporter, and then eventually advisor, and then founder, and today even investor. So Toby, welcome to the pod. Tell us a bit more about yourself.

Yeah, no, awesome, awesome to be here, Charles. Yeah, like a long career in, I guess, tech journalism, whatever, like soaps. So yeah, soaps. So I've been founding many different companies. Did, yeah, like, yeah, a long journey to getting here. Currently doing a Bitcoin lender, which is Reserve. Been very deep in the blockchain crypto space really since 2016. did many different companies and analytics firm, yeah, fund, and set up a business called Ordinals Bot that was quite well known in the Bitcoin space. And then now very focused on Bitcoin lending. And like you say, like you, Charles, share an obsession with all things agentic and AI. So set up this Machine Money podcast to talk with lots of people doing agentic things, um, specifically the agentic economy and, and like how, how agents and money are interacting, really.

Yeah, how they're gonna overtake us, right? Like, uh, it's pretty scary. So how did a guy like you went from reporter, journalist, eventually, uh, business owner? Did you always have the knack for business, entrepreneurship? How did you get to where you are today?

Yeah. So, well, I was very lucky in, in like, I started my journalistic career in, um, the Dow Jones Wall Street Journal and, and before that, like a niche private equity publication. So it's like at, at the time of the financial crisis, and I actually was kind of specializing in the link between private equity and syndicated credit. Yeah. So, so very interesting niche of finance, which was like, I guess, at a time where some of that, the, those early, like, structured credit, uh, instruments actually kind of, I guess, blew up the world in a way, right? Like, so that was the financial crisis. It was very weird getting that sort of front row seat on finance. Um, which is absolutely fascinating, but, but also quite troubling, right? So, um, which then drove me into entrepreneurship. Um, and yeah, by about 2009, I'd set up, uh, was, was, was one of like, um, basically on the board of a venture capital company, uh, like analyst firm of venture capital. And we grew that. very well tracking like how large corporates invest in startups. And, and that was a fascinating niche to track. And we, we, we had a lot of like the big, um, VCs and corporates as our clients. Um, and, and then, yeah, by about 2016, wanted to do more of like a big data business. Um, so set up something and everyone was like, blockchain and crypto is throwing off a ton of data. No one really knows very much about it. So decided to focus on that field and got just hooked on all of like blockchain things for a long while. And yeah, spend a lot of time and now I guess rode that into where we're like a lot of the stuff in the blockchain crypto space is converging with AI and Just here for all of tech innovation, really.

And do you feel your journalism background helped you being a better investigator to investigate these new technologies and then to write? Because the better writer you are, the better thinker you are usually. Do you feel that's part of your base OS?

Yeah, no, I think so. I think the basically like the cool thing about Journalism, it teaches you that there's kind of no such thing as a dumb question, right? So you can just almost learn very early on just to ask questions and figure out things and being able— and the reality is in a lot of things, people don't fully understand things. So if you kind of sort of almost take that as a sort of starting point, you can really figure out a lot of what's going on in the world generally. So I think that's what's very good about that area of thinking. I think it was a really good training ground. Obviously, I think like, yeah, and hence I always did a lot of research analyst firms, but over the years kind of just went, okay, it's better to be doing firms that are more like that. As you know, as someone who's done a lot of podcasts, like the, you can provide a lot of value and insight to people, and there's a lot of value in the connectivity that you get through doing an activity like this. But in most cases, they're very, very tricky to monetize, right? So it's kind of like, That's why I went to sort of, I guess Ordinals Bot was kind of like a launchpad and that was a great business to run for a while, although it was very cyclical. And now focused on like Bitcoin-backed loans and fintech lending, I think is a great business model because it's just very much like, okay, cool, you are facilitating pathways to how people get money for themselves. And I think in business, the closer you can get to things that make your clients money often is better. Yes. But there's lots of cool businesses to do, right? As you know, you're the master at like people twisting a few knobs and getting a few meetings and then suddenly they're making money, right? So

yeah, twisting a few knobs is more like destroying what they have and building it from scratch and engineering my own Ferrari as a machine, right? Because most people don't really know how to sell and they don't know where to go, to be frank. Most humans are clueless. Most founders are into jobs because They're not employable, right? Which is which was also my story, to be frank. Like I I want a boss, right? Like but I worked my ass off to build something very valuable, and so did you. Was your first one Novum Insights? What was that one about?

Yeah, so so yes, so Novum. So the first business entrepreneurially that I I was a big part of growing was. Global Corporate Venturing, which was like this network of corporate VCs. And then Novum was a research firm that I set up after that, which was my go at doing an early big data business, right? Like, like, so, um, which was really fascinating. And we were basically tracking, uh, and it had multiple iterations, but we, we basically tracked all blockchain and crypto startups and actually AI startups back then was the plan, but got so deep in the blockchain crypto niche that— and we were basically like what I specialized at a lot in my early career was like, and Novum as one of the— and GCV was almost like mapping what allocators of capital were doing, what kind of things they were investing in. And looking at the trends. So I was always like looking at like how people are investing in frontier tech and providing research and analytics on that, which was amazing, right? Like, because it meant I got to meet many like top VCs, many unicorn founders, and really got like the inside track on like how people at different phases were building some of the great tech businesses of our time, right?

Nice. And how did that lead to your next one, which was Metalline Capital?

Yeah, so that was very interesting, right? Like, so it was, it was in the crypto space. And so we were doing research crypto and blockchain. And by about the end of the first, like, major Bitcoin and crypto cycle, which was 2017, 2018, uh, where Bitcoin went up to $20K. and everyone got very excited and it had a run-up. It basically went up to like from $1K to $20K during the period we were covering it or whatever. And we, I got to know like the founders of various multi-billion dollar token protocols like before they even launched. And the interesting thing about that was, although I was like, telling the story of these people or whatever. I was kind of like, had that kind of Dow Jones DNA where you don't write, like, invest on in the stuff that you're surfacing as insights, right? Like, and, and everyone's like, well, if your insights are so good, why aren't you investing in the back of it? Which led to us founding Metalink Capital, which was a hedge fund, did pretty well. Um, and we, we were Um, investing in that early 2022 period, like, like kind of tripled our investors' money for a period, which is great. Um, obviously it kind of ran into issues around FTX, but was really cool. We got to like do some deals into— I invested in a business that nearly IPO'd for $2 billion. And sadly the IPO unraveled right at the end of the process, just before it was about to go public. Um, if, if that had come different, I'd probably be running MetaLink, uh, uh, now still, right, as a fund. But the, um, what happened then is basically I knew the founders of Ordinals Bot, which made like $1 million in a week, in the first week. So the website launched, it made $1 million in the first week of trading. I was like, guys, we've got like a really good venture-backable business. And so became a co-founder of Ordinals Bot. Um, which was really fun. And we, like, 2 multi-billion dollar tokens launched on the platform. We, we created something pretty, pretty interesting. So I went, basically went from running a fund to kind of putting the fund on ice because I was too busy building another high-growth startup, basically.

Right. Uh, what happened with Ordinals Bot?

Yeah, I, I mean, it's still So unfortunately, it grew like crazy, but like many things in the crypto space, has been quite cyclical. And now we're looking at how we rebirth Ordinals Bot at the moment, right? So watch this space is probably what is Ordinals Bot. But I mean, it's a very— the cool thing about it, like Galaxy, which is a big crypto financial firm, wrote reports and Ordinals Bot was at the center of it. it, we got to work with Ghostface Killah, French Montana, like some pretty, like, it was a very, it was, it was really fascinating working in a company that caught like the zeitgeist as a co-founder for a short period of time. But, but I think what happened was it was like very like this kind of weird Bitcoin NFT play. And as you might know, like the NFT market is just very cyclical and kind of, kind of a cool, cool technology searching for a use case really is what I would say about NFTs in general, right? Like it's kind of like stuff that's quite fun. People just use it for crazy speculation on JPEGs and whatever, but like that doesn't make a business fully, right? So, but—

And maybe I should have started with that, but what pointed you in the direction of crypto and Bitcoin? What did you see, right? And what did I not see? I was a student at that time, 2016. I have a friend that was obsessed with Bitcoin, but obviously I didn't catch it as you did. So what was the moment you knew that this was something special?

Yeah, I think it was an amazing time. What I loved about it was the democratization of it. Like, like the, the, like anyone, like, could do things and, and what I think has been really special. And I think that's where the AI space, right, has been a similar wave, right? Like, it's very much like this was something which put the financing into the hands of the technologists. Mm-hmm. without needing any of the gatekeepers, right? And I think that's something that would be really great to get back actually, because in some ways we, the early people in crypto and blockchain at that phase, messed it up, right? Because there was a lot of talk of a disruption of the VC industry and this kind of new breed of creating token economies. But I just found it fascinating because you could, like, I guess, like, the ability to store data in a distributed fashion, peer-to-peer. And like, what was great about it was it provided a lot of opportunity. I think what was bad about it was that everyone was quite immature in their governance, right? And I guess like an analogy to today's era is like what happened around ICOs and tokens was very naive and idealistic. And if you think about AI slop, where everyone suddenly thinks they're an AI genius, And really, they're just like prompting stuff and whatever. It was a bit like that with tokens where people were like, oh, I can just raise $2 million from the crowd. And people weren't as— most people were not that smart at doing stuff once they'd— you get quite a big responsibility once you get given stuff by the crowd and you've got your moment. And in many cases, it's very hard as a founder of a technology company to do that well. But I still believe the great thing about the crypto, Bitcoin, blockchain space, although it can disappoint a lot, is it really still sort of is very much like people sharing value amongst their peers. And if we can get back to that in big ways, and I think we will do over the next few years, the, like, it just means you need to scale without, like, I think what we will see with AI meets crypto and AI evolving, like just information being very readily available. Is businesses will scale without needing VCs, without needing like gatekeepers. I think that, that period will, will, um, yeah, you'll, you'll just have very live financial markets that, that, that trade off information.

Right. You guys, guys like you and I, we're always like too early in our prediction, right? When do you think like that will happen? 'Cause I can definitely see it. I can see most corporations being a shadow of themselves in terms of how many employees they have and mostly employing agentic employees. I speak to them almost on a daily basis and they're so far back, you know, like in terms of mentality, some of them don't even see it yet, right? Like that's how bad they're lobotomized. Yeah. But I can see agents replacing pretty much everyone and everything. I don't see much of a place for human workers even in most spaces other than if they start their own business and they start being very gritty, super adaptable like most founders, right? So any macro predictions of when this will happen and what will happen to the economy in this agentic revolution?

Yeah, so I think, I think If you look at history, I think that the cool thing is humans typically find ways to adapt to major transformative technologies. But what is very disturbing about this current one is that there can be a whole host of activities that humans do busy work that the machine is already better than them at most things, right? Like, and it's like, I think you're right. Like, I definitely see it as a golden age of like entrepreneurship because it's all possibility. Like, almost like the, um, the good thing about it is you can really minimize your spend, right? Like there's a bit of token spend. There's a small group of humans in the loop with an AI sort of organization. So I think that's great. Having run many businesses and what kills most businesses is too much burn. Like what's quite cool now is you can find profitable things and, and almost like get the, get the formula working on the profit side, um, which is great from a kind of entrepreneurial perspective on the micro level. Um, how that pans out in the real economy is, is really disturbing, right? Because you, you do have like a lot of people who if they don't adapt, if they don't figure out how the new tools, um, how they can be sort of, um, positioned to benefit from the, from new tools, um, it is, there's lots of big problems. And I think that there's almost like a, I mean, we look at the riots in France, right? The other, like, like, which is crazy, right? Like, like, like. Um, that kind of thing. And, and I think we saw it in the US around like the BLM stuff and whatever, right? Like, um, there's, there's a lot of tension and anger amongst like very smart people, right? Like, like, like educated people anyway, even if they're not like maybe doing thing. So all these kind of, it's very weird to me how like, almost like the left wing has become almost anti-AI and anti-tech and whatever. And my memory is of Obama, right? Like, which sounds like you were in college when Obama was coming in and he was like super pro-tech and used it to get elected, right? So there was a kind of, there's a weird. thing that's happened in politics where almost like it's become like technology, which should be for everyone, has become almost polarized as a debate, which I find really weird. But, but—

It's all about incentives, right? You look at these people's incentives and they're not aligned with this because they're lazy as fuck and they, they're struggling. I mean, I'm struggling, you're struggling, but The difference with us is that we roll our sleeve, we accept it like adults, right? And we have the wisdom to know that if we don't adapt, we're gonna be in deep shit, right? Like, you're a dad, I'm a dad. We run families, we run business, we run communities. We can't afford not to do anything and be on the, obviously, the wrong side of history. There's no other side. Like, this is happening and there's no coming back. Pandora's not coming inside the box, you know? It's out and it's— Yeah. It's only gonna grow thicker and stronger and better from there. So it's like, if you can't find it, fight them, you join them. And liberalists, yeah, dude, like, I mean, I studied political science and most of these people are for freedom. And it only makes sense that AI will restrict their freedom, right? Because they're like hipsters and they don't wanna work and they just wanna have fun and be free, which is fine, which may happen in a UBI world. I mean, they're gonna have the possibility to do that, but till UBI, UBI happens in hyperabundance, which I think is possible, uh, most of these guys are going to suffer a lot. Um, one question for you, do you feel that all of this will cascade super rapidly, or will it just be a slow transition, right? Because when you think about it, if, I don't know, corporations start laying off a bunch of employees and other corporations adapt in competitive and hire agents and start firing off. Well, like 50% of the population is without a job now, and that brings even more pressure to the bank, right? Like, what are the banks gonna do if they have like mortgage to be paid? Yes. There's gonna be new competing solution, right? Like, it's sort of a creative destruction, right? Like, we're destroying, but we're also creating new stuff at the same time. Do you think it will be fast? And do you think we'll create new useful things fast enough to prevent like a literal civil war from happening when that happens?

I really hope so. I think we're going to need really strong leadership and like, I'm happy that like at least we've got people like Jensen Huang, right? Like you can see that guy is a real communicator, leader. Obviously, the others, right, like, like, can be a bit more polarizing and a bit weirder, right? Like Dario or Sam or whatever, right? Yeah. Or Elon, right? But, but the, uh, uh, like, I find it fascinating. I think that you've, you've got what I think is the technology is magical, right? Like, and, and so It's enabling and doing so much. And if you think about it, right, if I told you 2 years ago, 3 years ago, that most people would— Google would fade out of people's behavior and they'd be using an app that hadn't even been built yet as one of the major tools of most world corporations in Claude, right? And even ChatGPT was like this little, like, I remember playing like early, this kind of AI dungeon. You probably remember that, like the early, I had my kids, I used to like just play it with my kids.

OpenAI Gym.

Yeah, yeah. There were, yeah, so it was like, AI was like, OpenAI was like a little toy at that phase and everyone knew its potential, but it was like, if everyone told you no, The whole world is going to stop using any search engine and the LLMs will have taken over, like 2 or 3 years ago, I think people would go, yeah, keep on smoking the Kool-Aid, guys, right? Like, like, like, and, and it's been fast and it's, I think it's happening faster and faster, right? Like, like, like you're Mr. Agentic. Um, the, a lot of people are still struggling to use agentic tooling, probably 6 months from now. everyone will be using it. It's like, why? I've got my army of agents. Why wouldn't— like, technology adoption happens so fast because it's so magical, right? Like, and yeah, I think the reality is, yes, there's a lot of— there's still always a bit of snake oil salesmanship, right? Like, there's a lot of stuff where you go, yeah, you kind of scratch your head. But you can tell they might be a bit of a fad, right? But they either adapt or evolve, right? I've had many debates about, you probably know Instinct, right? Where people are using it and it almost like those kind of technologies, people go, oh, it can be replaced by Claude or ChatGPT and that the frontier labs will take over. But actually, I think You'll, you'll miss the go-to-market, right? A lot of these tech companies will just penetrate and get really, really good at doing certain things for people. And then they suddenly become part of your lives and you'll go, one business guy chats to another guy and goes, oh, you're not using Instinct for everything. I'm like, I'm, it's like, it's, um, it's, it's been so much better than ever having to deal with a PA or whatever. Right. Like, like, and so I think like you're gonna, Yeah, you'll get a lot of these killer use cases that people adapt to. Some of them will be faddish. A lot of them will, will just embed themselves and people will have forgotten in a year's time that they weren't using like agents in everything. Possibly like—

Yeah, no, no, for sure. And yeah, ChatGPT took the market by storm. It's intriguing also what happened on the tail end for them, right? Like Gemini sort of took over or took over back their market shares. And then there was Claude, which is the dominant player. It's such a fascinating race, right? Yeah. Yeah. Let's see what happened. Where can people find out more about you, Toby?

Yeah. So, so yeah. So connect with me on, on LinkedIn, Toby Lewis Reserve. The, on Twitter with Toby Novum. My company Reserve is a Bitcoin lender. So you can, if you want to borrow against your Bitcoin and we're looking at new financial use cases and bringing AI into that, go to reservebtc.co. And yeah, like you can, but yeah, reach out to me on LinkedIn is probably the easiest.

That's Toby and Charles for another Founder Wisdom podcast.