Justin Kan - Selling Twitch For $970m And Starting A Web 3 Gaming Company

I saw a tweet from you and it said something to the effect of, you know, I built the largest gaming streaming platform on the planet and web 3 is bigger. So I was curious, why do you see like this web3 and the gaming space where it's headed as bigger than where it's been?

This is an intro, intro, intro, intro.

Hustle and Flowchart with your boy, my boy, Matt Wolf and Joe Fear.

Hey.

Hey. Welcome back to the Hustle and Flowchart podcast. Today we are talking with one of the co founders of Twitch, the online streaming service that sold to Amazon for $970 million. Today we're talking to Justin Kahn. And recently Justin started a new business over at Fractal is. And Fractal is a blockchain gaming company where you can actually buy gaming assets on the Solana blockchain and they actually curate and incubate games that use Web3 technology. And in this episode we cover a wide range of topics with Justin. We talk about the story behind Justin TV and the story behind Twitch and what it was like to sell Twitch for almost a billion dollars. We talk about Justin's ayahuasca journey. We Talk about why Web3 is actually bigger than all of gaming that came before it. We talk about why they went and created the fractal is platform and how fractal actually vets out the best games. We talk about the fractal nft that fractal actually put out. And we also get some alpha directly from Justin about one of the biggest games that he's excited about right now. So we cover a lot of ground. If you're ever curious about what it's like to sell a company for a billion dollars or if you want some insights into the soon to be massive blockchain gaming world, we cover all of that in this episode. Now make sure if you're not already follow us over on Twitter. I am Matt Rwolfe. Joe is Joe Fear on Twitter. We also have hard fork gaming on Twitter and also join us over in the discord hustle and flowchart.com discord. That's where you can chat directly with us. We're in there almost every single day answering questions, sharing ideas, pointing you to cool articles and resources, all sorts of good stuff. So make sure you're following us in all those places. We'd really, really appreciate it and we'd love to chat with you, but for now, let's go chat with Justin Kahn.

All right, Justin. Appreciate you, man. We're rolling. It's good to see you.

Yeah, happy to be here. Nice to see you guys.

Yeah, we're nerding out a little bit on Colin and Samir's podcast and we noticed, like, you haven't really done a lot of these, man. So I think it'd be a good opportunity to kind of deep dive back on your story. Obviously, you've done a bunch of wild stuff, but also up to some very interesting stuff that lines up with the gaming stuff that we're all in. And crypto with fractal is. I mean, you guys are crushing it and kind of creating a whole new model that's. I could see it going places quick and I think it's what, a month or a few months old?

Yeah, we started fractal back in. We started working on it at the end of November, and so we launched it in January or like December 30th. So it's been pretty quick. And I've been live for. I GUESS it's been two months and a little and change. Now it's March 10th. So, you know, it's been going fast. Building up the team. We launched it as a secondary marketplace to let anyone buy and sell gaming NFTs so people can discover new games, kind of see the game assets for those games, trade them, learn about the games. And our goal is like, you know, really be kind of a trust layer. You know, there's a lot of shady stuff in blockchain. People don't really understand how to evaluate what games are coming. I know you guys are doing a bunch there, and our goal is to really do that layer where people can learn about the games and build some trust.

Yeah, man, we need that in this space for sure. It's early days. First time we met, we talked about due diligence process and how you have this whole scientific thing laid out, where we have a similar thing, but it's probably a lot less scientific. Let's dig into that a little later though. I think we'll deep dive. That's one of the pieces of our notes. I think that would be great for everyone to just see what you're looking at. Avoid the rug pulls, you know.

Yeah. But before we do, you know, you're very well known for starting Justin TV and then starting Twitch and then selling Twitch for almost a billion dollars to Amazon. Let's start the conversation there and talk about, you know, where did this idea for Justin TV come from? Was there anybody else doing anything similar at the time? Like, how did. How did that come about? That very first thing you started with.

Yeah, so I mean, Justin TV was pretty wild, right? It started off in 2006 is when we started working on it. This is before Instagram, Twitter, social media really. And the idea was like, can we create our own live streaming show on the Internet featuring myself and my three friends who were starting with. It was kind of like a zany idea. It was like Make a truman show or edtv or something like that. So like 24. 7 live stream. And I think we didn't know anything about video production or creating content at the time. So it turns out like there's a lot of work that goes into making a show that's good, as you guys know. But we had this idea so we built the technology to enable it to happen because we were engineers. And then we launched the show and the show itself was like pretty bad. Like it was not, you're not programming enough interesting stuff and it's really hard to produce something live. You know, you have to have constant stuff happening. But it did get us started with, you know, Internet entrepreneurship and making a website that, you know, was like kind of like social media website. And then from there tons of people wanted to create their own livestreams and so we really became more of like a YouTube for live video.

I was kind of learning about from your YouTube. Everyone's got to check you out on YouTube for one. So if you haven't seen Justin's videos on there, go check them out. Because you break down so many cool stories like this. And wasn't it like right before Justin TV you had the whole Calendar app and that kind of, I think it almost forced your hand, it seems like into this space a little bit through the connections you made there and stuff you learned along the way from starting to start up in general.

Yeah, I had this calendar when I was. This was back in 06 or 2005, I guess. 2004, 2005. We had started when I was in college. I started this company that was like a. It's kind of like Google Calendar and Google Calendar hadn't come out yet. You know, we just, we were like, okay, let's build something that's, you know, like a drag and drop kind of Outlook style calendar on the Internet. Unfortunately, Google kind of came up with the same idea immediately at the same time. So we built this prototype and the real positive consequence of that was that we got into this program called Y Combinator, which was investing in early stage startups. So start as like entrepreneurs, got some funding and then we were off to the races. It ended up not really working out because we didn't build something that was really like, you want Calendar with email. So it was kind of like it wasn't bundled correctly, I would say. And then, you know, it wasn't actually that great of an app compared to Google Calendar. So we ended up selling it. We kind of. Yolo sold it on ebay as a way to try to get some funds to pay back our investors, and we ended up selling it for $258,000, which was a huge amount at the time for us. But we, you know, it was kind of like, that was like our first.

Taste of entrepreneurship and on ebay, nonetheless, which is crazy. Yeah. When I saw that, I was like, wait, what? You're selling a business like this and you're putting all the code, like, you get all the assets, you know? I love it.

Yeah, we just, like, we had no idea. Exactly. It was like, literally like, somebody's going to get this for something, you know?

Yeah.

I think with Justin TV, I think you said that you got like $50,000 to go and make Justin TV. You know, how. How did you overcome the tech hurdles?

Like, how did.

How did you take that $50,000 and turn it into something where people were able to see, like, there's videos of you walking around on the camera on your head? Like, that seems like was. It was pretty novel technology at the time. So how did. How did that. How did you turn $50,000 into that technology?

Yeah, so we were. We were all engineers, right? So we're like, okay, how do we make this work from a technical perspective? And there was, you know, there's no streaming from the iPhone at the time. There was no iPhone actually. So there was, you know, it was kind of like, is this even possible? That was part of it. So we ended up, you know, cell phone modems were just barely getting to, like, speeds where you could, like, do some multimedia, like send videos and stuff like that. Right. So we basically took a bunch of cell phone modems and we built a computer camera, like a customized computer that was like a piece of hardware to, like, take data from a camera and then push it across multiple different modems. So we had, like, multiple modems, and we stream it at multiple modems. And then we assembled this, like, really shaky, like, piece of shit video, like, on the other end. And then we'd had to build this infrastructure to stream it out to the, you know, to the world of viewers. You know, we kind of had to invent this. And it was like, just. The technology was like, just there to like the hardware and the, you know, to make this happen.

I think how this lines up with where fractal's at. It seems like you have this like cutting edge technology and you're like, you're right there in the front leading edge of play to earn gaming. And all these projects launching before it's super mainstream. It's like the 90s all over again. It feels like with at least the blockchain style stuff. But don't want to detract from the tv. I'm just seeing similarities. I don't know if that's accurate for you.

I think that's right. It's very similar to Twitch actually, where in the beginning of Twitch, when we started we were like, okay, we're focused on game streams and we think this is going to be a new category. Honestly, it became much bigger than we ever thought it would be. But we were like, this is going to be a thing. And then a lot of people were like, it's not, they didn't get it. They're like, why would people do this? It's super weird. It's not going to be. The market for this is super small. That was, that was part of like, that was kind of like a lot of people who were not insiders, like hated on it.

Right.

And so here's the same thing where like the people who are, you know, believe in blockchain as the future of gaming. I think it's a new business model of gaming. It's pretty clear to me that that's going to be the case. But there's so many people outside of it that are like, this is, you know, these are scams. It's not going to be a thing. Like, why, what is this? What, what does this help with? Like, what does this accomplish, you know, for the games? Like, you can already buy and sell digital assets. And so I would say it's, it's, it's, you know, it's very analogous to that where I feel like I'm like a couple steps ahead of where the rest of the population is.

I think you're right, man. I mean we felt that from, you know, we've been doing marketing and content for 15 years, Matt and I, and like, that's why we basically burned the ships. Everything we're doing, we're like, man, there's just too much good stuff in this blockchain space. And then honed into gaming. Like, yeah, there's, there's a gap and it's way before most of the world's even aware of what this is. First you have to learn all this stuff, like how blockchain works and all this. And then. Oh, and then you figure out your little spot within there. Feels like you were doing that with Justin TV and Twitch too. It was like kind of finding your lane and finding a market, hopefully that can adopt it along the way.

Well, I feel like Twitch was really ahead of its time. And like, if you look at where E gaming is now today, I mean, Twitch was at the forefront of that. I mean, like, the E gaming world is so popular. I mean, I've got. I've got two kids and that's all they want to watch these days, is videos of people playing video games. And I feel like Twitch was kind of like the genesis of a lot of that. So just kind of going back to the storyline here, I'm curious, how did. How did Justin TV become Twitch and how did it, you know, how did you narrow down on gaming?

Yeah, so we had this site, right, that was kind of like YouTube for gaming. We grew it over the couple years after we launched until it was pretty big. The problem was that, you know, kind of stopped growing after a while. And so we were faced with this choice of like, what should we do? And we had a couple different ideas. One of them was let's focus on the gaming streams. My co founder, Emmett was really the one who drove that. He was like, this is the only content that I'd like to watch on our site. Everything else sucks. He really pushed us to focus on esports and specifically StarCraft streams. And so we just started with that and it just kind of grew and grew and grew. And so we put more and more resources of the company onto that until that was the main thing that we were doing. I mean, obviously now Twitch, I think it's like a top 10 or top 20, certainly site in the US and abroad. It's like super big as well. So I think it's like bigger than we ever imagined. But there was that core idea in the beginning that this could be something that was like the future of how people would interact around gaming content.

Are you still involved in Twitch at all? Or are you completely out of that now?

No, not at all. Not at all. Not since we sold it. I can't really take any credit for what's happened. Obviously in the beginning we kind of set it up and I think it was set up for success. But last eight years, Emmett, my co founder's still been running it. He's done an incredible job. It's a big company now.

Wow. Well, talk a little bit about the sale and that process, because I think there's a lot of cool lessons there for any startups or people looking to sell is like, hey, you said a line in. I think a tweet recently is like, expect nothing and you'll never be disappointed. And when you're looking for funding and all that, obviously there's a rocky road and you experience that funding or even just selling something. So what did that process look like for you guys?

So someone told me once that companies are bought, not sold. You know, like, you have to, which means, like, the buyer really needs to be the one generating the interest. If you're going around saying, like, I want to sell my company, like, it's really hard to find someone to buy it, you know. And so, you know, I think it's. It's reading about selling companies for entrepreneurs, kind of like watching porn or something like that.

Something.

Something aspirated, you know, it doesn't. It's not reality, right? Like, you don't have to worry about selling your company until you actually, someone's coming to you and saying, hey, I want to sell. I want to, like, buy your company. You know, like, the best thing is just don't worry about it, right? Like, you can't control people wanting. You know, you can't really control the inbound interest. And so, I mean, there's things that you can have. You could start talking to potential people who would maybe would down the road buy your company and kind of socializing your company, but, like, you can't really control whether they actually come to the table and try to buy the company or not, right? So most. My recommendation to most people is like, don't worry about it. That being said, like, once you get in that scenario, then, you know, there's. I think there's some tips and stuff I talk about in the video, you know, for sure.

And maybe we'll link up all that stuff because, yeah, you go deep on some of that, man. And I think, I think the whole thing is expectations and have a good crew around you to help you out.

Did Amazon chase you up? Did you just, you know, have an email in your inbox one day and Amazon was in there saying, hey, we want to buy you guys. Like, what did it look like? How did they approach you?

Well, it's, It's. It's kind of like when you're. When you're big enough, you know, like, you're big enough. Well, I think. Well, actually, probably not. So, like, if you're big enough, you're a big enough company, then you always have like core dev people, like basically partnerships. People in your company and their company were always talking like they're talking like every big company, right, like about how could we partner in some way, right? That's like someone, there's someone whose job it is at these, these companies and then your company like just talk to each other. It's come on like it's almost like foreign, foreign relations or something. There's like ambassadors in all these like different countries that are like always talking to each other about like what, you know, how the company, the countries might work together better. Oftentimes nothing comes of that. But then like at a certain point, you know, for some of these companies are like, is it accretive for us? Like what should we buy? These companies like that comes up internally and then you know, they're like, hey, what would you think of like oftentimes a partnership conversation, if there's some accretive value that would be created by you partnering, it turns into a conversation of, well, should we just buy you so that, you know, we fully align? Right. And then you might be like, well, I like money, so maybe, you know.

No, it just seems like every buyer is going to have a different motivation. But yeah, as long as you're, I guess if you're ready to sell and knowing your number I would assume is probably a big piece of that too. Sounded like you were kind of hanging around the billion number and it bounced around with the multiple buyers you had.

Yeah, I think our number was actually probably much lower than that in the beginning. But then people were interested. We thought my internal valuation of it was like, oh, it's probably worth a couple hundred million dollars. And then obviously we forced past that and of course I think they got a really good deal because today I think Twitch is probably worth ten plus billion, you know, so, you know, it's all a matter of perspective. But yeah, it's all good. Like, you know, I don't have any regrets in selling it. I think it was, it's. Amazon's been a good home for it and allowed it to continue to really grow, you know.

Yeah, man, what did you like, what did you take away? Because this would be what I mean, after just tv Twitch, it's kind of the same company, like two different startups. It seems like, like right there, like was after this exit, was there something personally that you learned and really got from doing the sale, but also the whole build up process, you know, maybe there's a money lesson that you learned but also, like, just how you manage yourself, your values along that way.

Because, I mean, there's a lot. Yeah, so that's a good question. Like, I, you know, start a lot of different companies, other ones as well, after these. This, you know, I started. Probably started like 10 companies now, you know, and many. Most of them were like, failures. Many of them were failures or some. There's some successes. But, you know, it was weird because, like, when I started off with Justin tv, I was, you know, I was thinking, like, if I could just make a million dollars, you know, I'll finally be set right like that. That was like, kind of the milestone that I had. And then we obviously, like, far surpassed that. But the problem was, like, your expectations are always growing, you know, wherever you're at, you're like, there's always some next goal or whatever. Wherever, you know, there's something around the corner. And so it was really interesting to watch. Like, as we sold the company, I was like, ecstatic for, you know, maybe like a week or something like that, maybe a month.

And.

And then I started to think, I'm like, oh, what am I doing now? Like, what's the purpose? Like, and I saw all my friends who had, you know, a lot of friends of mine started bigger companies like Airbnb or Dropbox or something like that, and I was like, man, we didn't really do that good by comparison. There's a lot of, like, you know, a lot of comparison psychology in there. And I wasn't super happy. You know, I think the biggest lesson of it, really afterwards was that, you know, you can have seemingly everything in the world and be unhappy and become being in a mindset of comparison. And then eventually, through a bunch of other modalities, I learned about, like, really finding my own intrinsic motivations and figuring out how to. How to. How am I happy with, like, what I'm doing every day? You know, like, the simple kind of daily things being present in the day versus, like, trying to achieve some big goal and really refocusing my life around that, which has made me, you know, just like a much happier, more present, more content person, you know, for sure. So that was, for me, that was like kind of like the big lesson. And I'm glad that obviously people often ask, like, are you in. Were you enabled to get to that place because you had this big exit? And I'm kind of like, yeah, yes. But it's not because I had this shit ton of money in the bank at that point. It was more because that made me realize that Was like achieving your goals is kind of empty in a lot of ways.

Yeah. It's like, well, I know you put a note that you did. Yeah. There's an ayahuasca session maybe, maybe in there or multiple. I've experienced it as well. I know that's like there's just crazy insights that flood in from plant medicines and sounded like, I mean, that could have been part of it.

Yeah, that was a huge component of it. So I mean the full story, like, so I sell this company, I'm like, wow, now what? And for a couple years I'm just like, well, I needed to start a bigger company and that was like something. I was great. But like, I need to like go bigger and start a bigger company because that's kind of like all I knew what to do. Right. Like, that's what I, you know, I was identified as an entrepreneur. I kind of self identified as an entrepreneur. I was like, well, I don't really get what the point of life is outside of that. So I'm just going to start a company and try to be a 10 billion dollar company and. Which sounds like very silly now when I say it out loud, but that was like what's in my head. And then I starting a new company and raising a ton of money and then I'm, you know, along the way, like I was very stressed and I had all these expectations, self expectations, you know, I was kind of like searching for some relief, stress relief. Right. Like, and so I ended up circuitously finding my way to like sit in ayahuasca ceremony. And what it revealed to me was that, you know, all my life I had made decisions based on trying to get the approval of the people, people outside of myself. And so I was like, just, you know, that's why I want to be an entrepreneur. I want to be successful and wanted to make money. If I do those things, accomplish those things and maybe people will like me, will approve of me. And that really came from when I was a kid. I realized through this ayahuasca journey. It's like that came from when I was a kid. I didn't feel like I got that approval that I needed. Right. And all of this was subconscious through my adult life. I didn't, I wasn't aware of it, I wasn't thinking about it. I was just like, oh yeah, I want to be, I want to like when I would check, you know, post a tweet, I'd be like checking, did people like it afterwards? You know, like five minutes after we opened Twitter and so. Yeah, yeah, exactly. And so I was just obsessed with, like, what do other people think? And then through that Ayahuasca journey, I realized, you know, I. That happened, and I could. That's. That's the way I am wired, and that's okay. I love that person. You know, it's actually served me in a lot of ways because it made me ambitious and got me in a position where I could become successful. And maybe I don't have to live that way if I don't want to moving forward. And so from there, that became conscious. And then it was a lot of, like, how do I rewire myself to care more and refocus more on my intrinsic joys or motivations? You know, so every day I just try to live. I mean, I could. What got me there was, like, a lot of, like, meditation, gratitude, journaling, the exercise and diet. Just, like, a lot of modalities just put me in the present in a good, happy state. And I think it's worked pretty well for me because. And I just. Every day I just focus on, like, what do I like to do, what do I love to do? And if I can do those things, then that's what's important. It's no longer really so much about creating the biggest outcome possible. So that's been the journey for me.

That's rad, man. Yeah. Thanks for sharing. And. Because not most people will share that kind of deepness, but I feel like everyone can kind of relate to that childhood. All this ingrained stuff, that's your patterns today. So it's cool where you discover that. And four Agreements. I'm just like. I keep thinking that book, I'm sure you probably heard of it or read it, but.

It'S exactly what you're talking about. Talking about, you know, especially in the expectation front.

Yeah. We were just talking earlier, actually, about how it feels like this whole web3 space that we've been into is just a whole bunch of, like, people getting out their childhood dreams as adults now. I mean, like, everybody's got nicknames. We were talking to somebody earlier who kept on referring to somebody they worked with named Poopy. Like, that was their name. Right. Like, and so it feels like this world that we're playing in, Web three is just this kind of, like, it's a bunch of adult kids living out what they, you know, they couldn't do as kids. I mean, you look at, like, the bored apes and everybody calling themselves Gins and all that kind of stuff. It's. It's. It's a very interesting place that we step into. And it's fun. I mean we're loving it, but.

Yeah, well, I mean part of human nature is to play, right. Like as kids, but also as adults, you know, people like entertainment and fun and like, why shouldn't you be able to have fun at work? You know, do work on things that you find fun. Like that's, that's why it's great to be in the gaming industry, you know, and Web three.

Yeah.

You know, I saw a tweet from you and I'm probably going to butcher what it actually said, but it said something to the effect of, you know, I built the largest gaming streaming platform on the planet and web 3 is bigger. It was something to that effect. And so I was curious, why, why do you see like this web3 and the gaming space where it's headed as bigger than where it's been?

Yeah. So I just think it's very apparent that this is a new business model of gaming that is very similar to free to play 15 years ago. So 15 years ago, you know, a lot, a lot of people, like history, you know, doesn't repeat itself, but it rhymes, right? Like in history is. It's like these, this is a very, it's so funny because I'm like looking at this, I'm like, this is exactly the same and I don't understand why people don't see it, but I think, you know, some people do. And if you look at free to play 15 years ago, the games that were free to play were coming out were like Facebook games or like Mafia wars and farmville and stuff like that. A lot of, you know, real gamers, like console gamers were like, this is, these games suck. These are scams. They're, you know, I want to pay up front. I don't want to be like nickel the dime in the game. And of course what happened was the games became better, more, you know, better graphics wise and more like hardcore games became free to play. Some of those games became the most popular games in the world. And now if you look at the free to play economy, it's tens of billions of dollars a year going to like from players to pay companies for virtual items like in the game. Whether it's unlocking levels or characters or skins, cosmetics, whatever. Right. And so that's the predominant business model game. The model of gaming has shifted largely from paying a fixed fee up front to I'm going to pay as I play this game for content in the game. And I don't think anybody's going to argue that, that you know, they might say I don't like it. And of course there's some indie games where there's like we're going to charge you up front, that's everybody, all we're ever going to do. But most people like have accepted the free to play business model and for the gaming companies it's, it's better for them, right? Because they can monetize the users at a higher rate. So you know they're going to do it right. Whether you think that's better or not. Right. And so I think to me blockchain NFTs, you know, inside games or putting digital assets in the games on a blockchain, whether they're NFTs or virtual currencies to me makes sense because it's as a next evolution of that because it's obvious to me that is actually better both for the companies but also for the players. And what I mean by that is like for the companies it's like if you turn your close economy, like the free to play economy where it's like closed system, you're the only one who can control what's happening or build on top of that set of digital assets to an open one where anyone can build on top of that set of digital assets and anyone can trade them, the players actually own them. You're going to take a control hit like you're going to have less control over what happens but you're going to create an open economy for the success, successful games anyways. You can create an open economy on top of which many people are going to build and participate. So other people could build whether it's gaming experiences or just defi experiences allowing people to trade and land and these assets, something like fractal, where there's a marketplace where people can exchange them, you basically create a much more robust ecosystem and then the value of those assets will grow much more than if they were in a closed state, you know. And so you as the issuer of those assets, either holding some of those assets in reserve or like you know, with owning a royalty on them like NFTs often have embedded in them, you will be that, that's going to be super valuable, right? Like that's going to be much. I think those gaming companies will show that that's a much more valuable model. The second thing is like why is this better for players, right? And I think the reason it's better for players is like well instead of just black holing your, you know, money into some like digital Asset that you don't, like after you're done playing the game or you're bored or whatever, like, nothing happens. You're actually gonna pay for things where you have ownership of those things. And then you can do whatever you want with them. You can sell them, you can trade them, you can maybe you just, like, when you're done with the game, you forget about them. But it's. It's kind of like, to me, an example would be like, if, I don't know, maybe like skis or something in a ski mountain, like the V1, like the old school was like, the skis only worked on one. You know, they. They like you had. You bought them from the mountain and you didn't really buy them. They just like, lived in on the, like, ski resort, whatever ski resort you were going to, and that's it. Like, when you left, you just left them there. And this is like, you know, kind of the ownership model that we had today where you, like, buy these skis, you, like, ski on the ski mountain, and then you, like, if you want a new set of skis, you can sell them, you know, you can loan them through a friend, you can trade them, you take them home with you, they can sit in your garage and you can forget about them. Right? But the point is, like, because you have this actual ownership of it, it's more valuable to you. It's more real to you. And I think, of course, the argument is a lot of people are going to say, well, why do you need. You don't need blockchain to do this. It's already a ledger in a database and you can have ownership. They could say you have ownership of it. But the thing is, when it's on a blockchain, when you put things on blockchain, you don't have to have that trust in that company to say, oh, they're always going to respect my digital property rights. And I think we're moving into a phase of the Internet where people don't trust big companies that much because they've seen that big companies generally do what is in their interest at any given moment, and their policy can change drastically over years. One day they can be like Twitter saying, hey, build on our. We're an open ecosystem. Build on our API. And then years later, they can have a new CEO and they're like, well, actually, we need to control the clients because we want to make money from advertising. So I think it's just that putting these assets on blockchain removes some of the need for trust and Makes people have more faith in the asset itself. It's kind of like US Dollars being backed by gold initially. And eventually there was enough trust that they could say it became a fiat system. They're like, hey, it's not backed by gold anymore. But people trusted it. But in the beginning, they want to get people to be like, I want to hold US Dollars. They were like, well, these US Dollars are backed by gold and you could theoretically exchanges dollars for gold if you wanted. Most people never did that. Right. But it built that trust for them.

Yeah, I like that analogy. All those analogies. Thanks for that. And I think one thing you said there, which fractal lands right in the middle of, is having a marketplace for these assets seems crucial. And you guys are focused on Solana, but now you're giving way more benefit to the asset owners and obviously the games and a bunch of other people in the middle. But I feel like you're just like the central hub that allows for a lot of what you just said to happen, but happen way easier. Connect with the best buyers in the world or the market that's available for these assets. So let's talk about Fractal man and how that came to be, what your motivations were to even start it when this could be monstrous. Who knows where it goes? You weren't looking to build another big company. But I don't know, maybe it'll just happen naturally. But tell us about it.

I think the best companies are started when people pursue their curiosity, right? Like they're just doing something they're interested in. You know, my friend Brian Armstrong like started Coinbase and like, he just like was interested in digital currencies, right? They're really fascinated about it. And so he's just following his curiosity. And like, you know, with Twitch, with Justin TV and then. And then with Twitch, it's like we were just like trying to do something cool. I thought it could be a company, but obviously turned into something much bigger. And then with Twitch, like, it was more about Emmett, my co founder, being like, hey, this is the coolest content that I like to watch. Like, let's just see where this goes. Fractals, kind of like that. Where, you know, my co founder David and I were riffing on like, could we do something in crypto and blockchain? I'm really interested in crypto because to me this is the new wave of how things should be owned on the Internet. It's like, well, let's make. It's about creating, you know, distributed incentives and ownership so that the world who makes that market can participate in it.

Right.

I think to me that's what's interesting about, about crypto. And so, you know, I was really red pilled on it maybe a little bit over a year ago. I'd been holding for a long time, but I didn't think it was going to work for consumer applications until maybe like 15 months ago. And so we were discussing apps we could build and I said he was really into NFTs, pushing into NFTs and he was early in Solana ecosystem. So he's like, let's do something Solana, NFTs. I'm like, the thing that's going to work in my opinion is games because there's already a market of digital assets. It's just in these closed systems. So putting them in open systems is like, that's obviously going to happen. And so then we just, we research and brainstorm. We thought about like, should we partner with someone who's like already doing this? But ultimately we just said let's just build something ourselves and see if we can learn what we can learn. And that's how we got started. That was a couple of months ago. Feels like a long time.

But in November if you go to what fractal is, you just look at this thing and it's beautiful. Like the layout, I'm not just saying this to, you know, stricter, you go, whatever, but like it legit. I went on there, I was like, damn, this is cool. You got the videos of these hottest games coming out in the space. It's clear, it's clean. You have a marketplace that you announced via hot tubs. I saw, which is awesome by the way.

I was over on the website playing Mini Royale directly from the website the other day.

Yeah, awesome. We embed the games, we try to showcase the games. We think of games as our partners and our goal is like, I think games is how the next hundred million people get introduced to crypto. Right? So my goal is like just like at Twitch where we said, hey, the streamer is the forefront. We want to build the best platform for streamers. Here we're saying we want to build the best platform for games. We want to be the best friend of gaming companies out there and we want to work with the best gaming companies. So we are pretty selective in who we launch. We really vet companies for like, are these people who are going to actually make a game, are they experienced? Do they have some like, you know, do we think that they're going to be able to create something and Those are the partners we pick for our launch pads. You know, there's so many different scams in crypto or people who don't actually end up shipping or don't have experience. You know, that's kind of how we, what we. What we stand for. We try to give people information. Like, we, you know, I do like a podcast with all the games that we launch. We try to give people more data and like, introduce them to like, who are, who's the team behind this? And then. Yeah, that's our, that's our story. You asked earlier about, like, motivation. For me, it's about following my curiosity. Like, I, I'm just. I think it's really cool that, like, I think the metaverse gets created. I mean, whatever. Yeah, I think the metaverse gets created by like, yeah, whatever we call it. It's like identity is one layer and commerce is the other. And identity, you're kind of solving that with Twitter, with Discord, PFPs. It's all super interesting. And then commerce is the other part. And to me it's like, this is. Fractal can play a role in how that commerce happens.

I like that distinction. Yeah, because that's similar to how we got appealed to gaming. And I wasn't sold by gaming at first. I'd say you were more the partner in our duo to say, hey, let's go look at gaming. And then that's where we got hooked up with some other friends that you've met. And it's just like instant utility built into it in so many ways. Identity. But you said commerce as well, with marketplaces, and it's just like it can maybe one day break away from the bigger blockchain market if something tanks, bitcoin and all that. Ideally, a game will still be popping and have its value pending that the economies inside the game are good and hold true.

I just try to gauge where the future is going to go by looking at what they kids are into.

Right.

I've got two younger kids and they're all into YouTube and watching other gamers play and watching live streams and all that kind of stuff. And I'm like, you know, Mr. Beast, gaming channel gets like 10 million views whenever he puts out a Minecraft video. Like, I'm pretty sure gaming is, is gaining momentum. So, yeah, that's, that's where it feels like to me. Now, you mentioned, you mentioned with fractal.

You really do quite a bit of.

Due diligence and only let the best of the best in. What are some of the criteria that you look at to, you know, to decide this game is a good fit or not.

Yeah, so, so it's really, it's similar, you know, so I've been an investor for a long time. I was at Y Combinator investing in startups and I've invested in hundreds of companies. And when you invest in a company, in an early stage company, right that's really pre launch or right when they're launching their product or maybe the product is nascent. You know, you're really about who's the people? Who are these people? Like what's their track record, what's their drive, what's their motivation? Are they going to be able to run through the problems that you're going to inevitably hit when you start something, you know, and you guys have like done a lot of entrepreneurship as well, so you. Probably sounds familiar to you, I'm sure. And so here it's the same thing. It's like, who are these people? Like who are the founding team? Like that's why I think it's so important. Like there's a lot of these anonymous projects, but sometimes the people behind them are very competent. You know, obviously like the board, ape guys or something like that. Like they're, they were able to execute something really well. But like how can you make a real decision without knowing who the people are? Like everybody I know in business, including in crypto, really make decisions based on the people and the teams behind it. Right. And that's for us, that's what we're evaluating. Are these people people who we think can execute and then how do we showcase that to the audience? Right.

I think that's smart because even because we've been on calls with some founders who were not doxed yet, but you know, they had a crazy track record. I'm like, man, this is really interesting, but you're not saying who you are. And it was almost like there was, you know, I don't know, I guess there's strategies around all of that. So, so who knows.

But yeah, so actually with fractal we will, you know, they don't have to dox to the audience, although I do think it helps your like credibility. But they definitely have to dox us. Right. Like so we, you know, we. There's a distinction there. Yeah.

And what do you guys do? Because like when we chatted originally, you guys were talking about the team aspect and like a couple of the other qualities, but the fact that you're kind of like, you mold them a little bit or at least you're looking for folks that you can kind of, maybe you give them some feedback, they'll tweak something based off of whatever you've learned or seen in the market. Is that kind of part of the strategy overall?

Well, we help, I would say in terms of mints, we're like consultants. So when people drop their assets, we've seen many drops now. We've seen people do it well, we've seen people, maybe we've learned things that we could do better. And so a lot of what we're doing is trying to get people to learn the best practices and help them with that and to make their mint as successful as possible. So it's, I mean they don't have to do like. We're not forcing anyone to do anything they don't want. Right. Like our goal is to be like a consultant that's like helping them be the most successful with their minutes possible.

Do you guys look into the tokenomics or help with the sort of in game economies and currencies with the projects you're working with? This might be getting a little too into the weeds, but it seems like a lot of the games that are out there right now, they have this issue where they have the governance token and they have their sort of in game economy token and the in game economy token. If there's not enough utility for that token, then the token just goes to crap. We've seen it with a lot of games. You know, Axie Infinity is probably the most famous game where their in game economy token just went to crap. Is, is that something that you consult on with, with the games? Is that something that you pay attention to? Like, does this seem viable for the long term with the tokenomics?

Yeah, we don't ourselves but I think that's something that is super interesting and maybe there's more we can do in the future. But yeah, right now I would say we're not the experts on kind of balancing your in game economy. There are a lot, I mean this is something where I think Web3 can learn a lot from the Web2World, where the Web2World has been creating in game economies that are balanced for a long time.

That's the beauty of this space, that we're all learning in real time, man. And it's kind of like just get it out there as you can and you'll get more feedback and the right people, I guess show up along the way.

That's what I love about this space.

Yeah, the last thing I wanted to talk about was you've got a fractal nft. And I'm curious if maybe you can break down what that is and how that benefits people for owning the fractal NFTs.

Yeah. So fractal NFT was this collection of 100,000 special snowflakes that we launched out to our audience of people on Discord. We gave it away for free. It's been a free airdrop. There's been. I think we're like one of the top Solana collections now, which is cool. But, like, people are trading them, selling them. And what it is, is it's like it was meant to reward our community. So people who are fractal NFT holders want to give them more benefits on our marketplace and in part our games. So there's been things like people have, like Genapets act allowed our NFT holders, some of them. There's different factions, right? We have different factions that are different rarities. And then, you know, they allowed some of the higher factions to like join their alpha earlier. Right. Like they could just like get access to the alpha or other people have done like whitelist access for fractal NFT holders. So stuff like that. We've been able to create these benefits and then we're doing like, maybe more complex integrations where people do like in game levels and like different cosmetics and stuff like that. We also just did a hackathon called F100 where people are actually creating game experiences on top of the fractal nft. So it's just like a fun way to engage the community around, like, gaming. And hopefully in games and metaverses, they get some reward if they're a fractal NFT holder.

I love it, man.

I know that I said that was my last question, but I actually do have one more question.

Go for it.

Are there any games that you're excited about right now that either just came out or that are on your radar, that are coming out soon, that you think people should be paying attention to 100%.

So there's one we're launching soon called Psyker, which is on fractal. You can check it out. Fractal is. And Psyker is like a fighting game. It's kind of like a steampunk. Not steampunk, like a cyberpunk, grimy, gritty style fighting game that's coming out. I think it's really innovative. You're able to kind of make these different customizations on your character through NFTs. And I played like a ton of Tekken when I was a kid. Like, I just Love Tekken. And so there's like a lot of, you know, it's kind of like Blade Runner meets Tekken vibes in the game. So I'm really excited for that one personally, as like, a fan, you know.

Solid dude. Is there a.

They're doing a mint soon, like in within this week. Like, I don't know how long it's going to take you to publish this, but yeah, they're doing a mint this.

Week on next Tuesday, this goes live, but we'll probably get it out prior to that, or at least some message about it for sure.

All right, well, then we could just say, like, you know, you could buy them on the second, you know, probably on the fractal marketplace as a secondary, if you're interested. Yeah, right.

On fractal. I mean, you guys have like a whole. Is there a way to actually look at the upcoming stuff you have? I think it's on the left side, right of the screen.

You can kind of. Yeah, it's just on the left side of the bar. There's like an upcoming Mints and you can see it there. And there's about 50 games that have been. I mean, it's so crazy. There's so many people working on games. Like not just on Solana, but on ETH and other chains are like. There's so many. You know, there's probably like 50 games in Salon ecosystem that we list now.

Wow. Yeah. It's insane. I mean, just seeing. We see a lot of it. I know you do as well. A lot of inbounds, you're just like, holy crap. There's a lot of people trying to attack it. But that's more the reason why, you know, processes and marketplaces like yours help weed out a lot of the ones that might not be so good. The bad actors, potentially just whatever it is, you know. Justin is amazing, man. Is there anything else you want to shout out your YouTube, Twitters? I know you're kind of becoming a thing on Twitter. It seems like you have some money posts on there, man.

Thanks, man. Well, you can check me out on Twitter, ustincon or I'm on YouTube. I love making my YouTube channel. It's not just all NFT content. It's just about anything and everything I find interesting. And so also check out Fractal. Ractlewagme is our Twitter and our discord is fractal. Wag me and then check us out on the site is Fractal is perfect.

Very cool.

We'll link all that up in the show.

Notes for sure. So I appreciate you, man. We're following along and yeah, let's just keep going. This is going to be a fun adventure, I'd say.

Amazing. Thanks guys.

You got it, man.

Awesome. Thanks so much for hanging out with us today on this one and listening to us chat with Justin Kahn from Fractal is now just a quick reminder if you haven't already, follow us over on the various Twitters. I am Matt Ourwolf on Twitter. Joe is Joe Fear on Twitt. We also have Hard Fork gaming on Twitter where we focus mostly on the gaming world over there. And also follow us in the discord hustleandflowchart.com Discord is where you can find that. We like to jump in there almost every single day, answer questions, share cool stuff. Lots of good things happening over@hustleandflowchart.com Discord and if you enjoyed this episode, if you got something from it, you found it valuable. You found Justin's stories really interesting. You like the sound of my voice for whatever reason. We would really love it if you'd share this episode around. That's the best way that you could support the show is point other people to this episode and tell them to have a listen. We would really appreciate it. And thank you so much.

See you in the next one.

Sam.