CEO and Founder of Wachsman, a PR and professional services powerhouse for blockchain and crypto companies
My guest today was David Wachsman of Wachsman PR. While Wachsman’s primary focus is PR, they are considered a professional services company offering a variety of services to FinTech focused clientele.
We talk about David’s thoughts on the current crypto PR scene, learn about how Wachsman got started, and get his take on a variety of key market forces in the industry right now.
David is a brilliant, well-spoken guy who I think you’ll find has a wealth of knowledge about this space. Now managing a company with roughly 170 employees and three offices around the world, you won’t want to miss this one.
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Mike: We are back with David Wachsman of Wachsman. David, how are you?
David: I'm good, thanks for having me on Mike.
Mike: Absolutely man. Before we kind of dive right in into what you guys are doing in this space. I'd like to get a little more information about yourself, how you got into crypto, what you did before Wachsman, all that kind of stuff.
David: Well, in 2013 I was one of the millions of people who were reading about Mt. Gox and seeing how bitcoin went from like $7 to $1,200 in one year. I was probably like a lot of people saying, man, I must have missed it. Bitcoin was a pretty crazy idea. I'd of course seen about it in tech journals and magazines a couple of years before that, but didn't really get into it even though economics was something I was always very interested in. Digital currencies for instance, just never seem to have economies that worked and I didn't understand bitcoin at the time, so I didn't get it.
But in early 2014, I met the CEO of a bitcoin exchange at a bar in New York City. Very typical thing to do. I was running a PR agency day to day and it turned out this bitcoin exchange was trying to find a way to separate themselves from the other ones at the time like Bitstein, which actually at that point had yet to come to the United States. I started working with them professionally doing PR since early mid 2014 and you know how it works with crypto once you get to taste, you're in.
Mike: Yeah, absolutely. Very cool. Have you always been in PR? Before that point, were you in school? Like what was your career before that?
David: I studied economics and English and I had a number of different jobs, that usually had one tether in mind, which was professional writing was a big component of it. I worked in politics, on campaign side for a number of politicians. I worked in advertising, I worked in biotech on the business side. I worked in app development, again on the business and marketing side. In almost all of these, some sort of writing and being able to explain how either complicated companies or organizations worked was part of the job.
In 2013, beginning of 2013, I took over a day to day operations for a boutique PR agency in New York called Ericho communications. My boss at the time, the owner of the company, Eric Yaverbaum was a genius in all things PR. He literally wrote 'PR for Dummies book.' That was one of the things I read when I was there, but I got to work with an array of clients at the time that we're not bitcoin at all. In fact, there was no specialty except that they were clients that he had brought in and he had an incredible reputation.
I had a billionaire real estate developer, the world's most famous debt collector, cosmetics companies, industrial LED manufacturers and an enormous amount of different companies. Just very, very are disparate, but no specialization at all. It was in working there that I stumbled upon Coin Center, that was my first client in bitcoin.
Mike: Got it. Okay. What sold you on all this stuff? You had these huge clients in PR, why kind of move over and do crypto, which obviously at the time and still today is still new?
David: Well, it was a little bit newer then, but as I mentioned earlier, I thought I had missed the boat in some ways. I started working with Coin Center in 2014 and through that got to meet many other players in the industry. It's just the nature of how the industry works, you need partners. Nothing is fully developed yet. When you're working with bitcoin exchange, you have to go and meet with, for instance wallets. All the different wallets that are going to be integrating or not.
Bitcoin trading at the time is somewhat similar to crypto trading today. There were a lot of forex traders who are interested and so I've got to meet a lot of different companies in the forex space and some of the software packages they were putting together and algorithmic traders, which was just starting at the time. Some of the exchanges were really kind of turning on their more sophisticated APIs coins that have fixed API for inst. You had to understand the technology because you can't talk about bitcoin without getting it.
I kept going to these conferences. I kept meeting these people and particularly back then you had really great access to some luminaries of the space today. Even then, I considered them legends and I got a chance to meet them, get to know them and become some of their friends too. In 2015, I'd been continuing to work with Coin Center. I started working with a number of other companies in the blockchain space. I called it the bitcoin space back then who were doing different things. I have this crazy idea in mind, which was obviously not so crazy at all, which was to specialize in the industry.
What if I could start up my own firm with my idea in about early mid 2015 and have a bitcoin software wallet, a hardware wallet, a mining pool and ATM network, a VC, and of course the bitcoin exchange Coin Center? With those companies in mind, I was able to accrue quite a menu of options. I went and launched my own firm towards the end of that year and back then bitcoin just didn't pay the bills. I know that's crazy to say today, but VCs completely stopped investing in Bitcoin in 2015.
2014, they had done their kind of last licks, but they weren't getting any adoption. They weren't getting return on investment. This of course, before the days of cryptocurrencies kind of just growing and growing and growing and mainstream interest. What was happening instead was people realizing that bitcoin at that time particularly had some technical limitations and the other infrastructure simply wasn't there yet.
There was no institutional demand. There was no retail demand to use bitcoin as a payment method, not sufficiently anyway, and the VCs pulled back. By the time I started working in this industry full time, it was kind of actually at a relative low, but I really believed in the tech because I saw one thing that I think is obvious to anyone who's ever been to a bitcoin conference or gone to a crypto meet up. There were enormous amount of IQ points flooding the space and I kept talking to these people and I was overwhelmed with how brilliant they were and said that these guys have to be onto something.
Mike: That's fascinating. I appreciate kind of the in depth history there. A little bit more on Wachsman then. What makes you guys different? I'm sure as the space has evolved and we've gotten more VCs in the space, especially this year, there's all this institutional money that people are talking about flowing in. The competition around PR has to be increasing, so what is it that you guys do differently and what has it been that has allowed you to grow so tremendously?
David: I'm a public relations person at heart. I think we've kind of described that on this call. But Wachsman today is a professional services firm. What that means is we offer a number of different services that in some way, shape or form, use the blockchain or are interested in blockchain. This is kind of the one distinguishing characteristic that separates all of our clients from the others. There are other major PR agencies that are owned by big holding companies or they might be very large independent agencies with possibly even thousands of people, but those organizations don't have a specialty the way that we do.
There are other PR agencies certainly that focus on the blockchain space or at least with a large percentage of their portfolio. But we're by far the largest that focuses only on this industry. That's because although we didn't start first, there were a couple of great fore runners that I got to pay credit to. People like Michael Turpin who's a luminary in the industry and someone who saw this way before I did. When I started, I was the only New York Manhattan based PR agency I had that was focusing on this industry.
I know that sounds quite small, but Manhattan is where a lot of PR agencies are headquartered and they're kind of seems to be a professionalism to that because it's just something that's existed in traditional needs for a very long time and the tactics and what we do is very traditional. Anyway, we're a traditional PR agency. That's that component within a professional services firm. Outside of that, we offer events management and consulting. We offer strategic advisory and a number of other services that we're kind of rolling out over time.
Mike: Got it. Fascinating. I wasn't aware of all some of those other professional service pieces, so that's great. How many clients do you guys have now? How many team members, are you just in New York? What's the setup looking like?
David: We started in New York 'cause that's of course where I'm from and actually really my first employee who stuck around was a young woman named Emma Walker. She was from Ireland and I interviewed her and Jessie Plats an Australian guy on the same exact day in February of 2016. I couldn't hire them both at the time since we didn't have enough business, so I hired Emma first and asked Jesse if he would be willing to wait two weeks. He said he could wait a month, which was amazing. She started in the beginning of March, him at beginning of April.
David: Today, Emma is managing director of the office here in Dublin, which is where I'm sitting right now and we have 37 employees here. There's an office that we opened up in September in Singapore and we have, of course our headquarters in New York City where Jesse is a public relations director today. Overall we have 170 employees.
Mike: Wow, that's insane. Two years, that's crypto growth as people would call it. Two years, 170 employees. That's insane.
David: It's insane. I never would have believed this had you told me it was going to be this way. I feel lucky all the time, but I was at the right place at the right time.
Mike: Very interesting. Well, I'm looking forward to getting into some kind of interesting PR thoughts, especially in a crypto industry, that kind of can have bad PR pretty easily. Right?
Mike: But as kind of a starter, almost everyone in crypto knows about the bitcoin pizza guy. Where there was this guy way back when, who spent 10,000 bitcoin on pizza and it was kind of, I guess what many would consider a moment where people kind of said to themselves, "Oh wow, this stuff can actually be transacted for something that I value or be at 10,000 of them still." It was a monumental moment. That as an example of something that a lot of people point to in crypto, is there an example like that be it a PR blunder or a PR save in the traditional PR Industry that, maybe crypto folks don't know about, but anyone in the PR professional services space does that could maybe kind of give some people some context?
David: Well, so the bitcoin pizza guy, he took the 10,000 bitcoin he received and sold them for not much more. I would look at that story and say, "Man, you made a huge mistake." In PR, we see big mistakes all the time. A large percentage of what we do is trying to prevent disaster or to mitigate it and I can just think of so many times and you see this in the newspaper every single day where an organization that could have made a better decision, even on just communications, failed. They just didn't say the right message at the right time and consequently lost the trust of their customers, of governments, of everyone.
I would look at oil companies, for instance, and some of the oil disasters that we've seen, the Valdez disaster in the Gulf of Mexico where the communications on those things were very poor. The companies came across as quite arrogant. I think what's led to and what's been a very good thing is the rise in alternative energies as companies have realized and people have realize that they need to seek alternatives. This is the power of communications when there is a trend of some type, doesn't come from nowhere. It comes from people. It comes from journalists who see what's going on. Now it comes from social as well and people take that, take an event and turn it into action.
Mike: It's wild because these big oil companies, these people have massive PR teams, but yet still these problems exist and certainly not due to counsel from those teams or anything, but it's still occur. The reason I bring it up is because I think it'll be interesting in the crypto space as it grows. What problems these projects run into for saying the wrong thing or maybe order or something kind of twisting words, and how that is handled, especially for a startup is super important.
I came out with a blog post a little while ago about false narratives in crypto. Trends or something you [inaudible 00:15:08] go out there and it's interesting because if you look back towards that time of 2014, 2015, exchanges were hated. Coinbase at one point was like one of the most hated crypto institutions on the planet, namely because their service was just behind the level of user growth they saw. What I talked about there was that I think ICOs are going through the same thing and I'm sure two, three years from now certain crypto asset or a third party in this space we'll go through a similar false narrative. But as you look at the space today, what's the biggest PR issue that you see the space has in relation to the goals that it's trying to accomplish?
David: Well, I'll give you an example. A few days ago I sat down and was lucky to have dinner with a C level executive at a multi hundred million dollar logistics company. They're looking to use blockchain as part of their technology stack for track and trace and supply chain. It makes complete sense. It's a low hanging fruit for what is essentially a distributed database system on steroids. Here's the problem though. What they have been pushed into doing so far is working with private blockchains and I think private blockchains otherwise known as distributed databases do have value.
They could for instance, achieve consensus more rapidly, let's say than a very distributed system, depending on how it's architected especially. But this guy's being pushed into using things that just aren't there yet. The reason they've been pushed in that direction is because the word crypto and just the entire concept of public blockchains is something that's scary to far too many people. I think that's a shame. I think the fact that crypto had a crazy run in 2017, that's a wonderful thing because it captured some interests that brought more people in the industry.
It brought more capital. It brought more companies that are willing to go and double down or at least do their homework. But one of the challenges with any of this and with the fact that bitcoin itself has had to some extent inauspicious beginning, it's led to people not trusting technology. When I say that it's a shame, it's too bad. We should have far more people today using, developing and building a blockchain, the ones we have today and what's coming up in the future.
Mike: A lot of that is education too. It's hard to take sentiment from say mainstream media or a friend or something like this and kind of pass it through your own internal filters if you don't understand the tech in general.
David: It's one of the challenges.
Mike: Exactly. How are you seeing Wachsman or others in the space kind of fight this problem of education, especially with a technology that has game theory and computer science and all these different factors associated with it?
David: I think you kind of nailed one of the problems. Blockchain is one of the most multidisciplinary areas conceivable. You got game theory and economics, but you've got psychology, lots of UI. You've got almost every discipline that in some way, shape or form can work with blockchain. Our clients and we have about 65 today, they span from everything from giant social networks and gaming companies to small startups trying to innovate on the protocol level and everything in between.
We've worked with companies in the fashion space and insurance companies and I don't think it gets much broader than that. We're at the beginning of the blockchain revolution and if we're already seeing [inaudible 00:18:44] this brit type of company endeavor in the blockchain space today, what's going to happen in the future? I think it's the future's bright, but in the meantime there's a lot of people who need to just get it.
I told you how hard it was for me and I'm clearly someone who's now vastly interested in the space. What we're seeing is that a lot of people are afraid of blockchain because of the honestly false narratives that are out there. They're afraid of working in the industry and I've seen some research and some research will be coming out soon from us that shows that there are a lot of people in some places who simply do not want to work in blockchain.
Why? It's just 'cause they don't understand it. They don't know what it means. For them, it's this foreign entity and it's something scary and I think that we have to do a really good job of educating. The good news is blockchain people tend to be very open source. They tend to be very much okay with sharing what they know. That's how I learned everything that I do and my team learned everything they do. It's about going out there and meeting people and learning something. In terms of what we do for a living on the PR side especially, there is a whole lot of educating reporters that we've done over time.
There are some reporters who were in the industry before me, Paul Vigna and Nathaniel Popper, Michael Casey. Those guys were working in this industry before I was and I learned a lot from them, but there are a lot of reporters who have come on the scene and taken up the speed over time, who we had the great privilege to start talking to and provide them with examples and YouTube videos and podcasts. This way they can start to understand the fundamental technology so they can understand the use cases and the possibilities that are upcoming.
I think that some of the stuff that you're doing right here is very, very important. People need to understand the nuance, especially today. If I asked you, do you understand how your microwave works? I'm sure they're viewers to this podcast who do, but most people don't. All they know is it makes their hot packet pretty quickly. Blockchain is simply going to be a technology that the vast majority of people don't know how to use, but they're gonna be using it all the time. I'm convinced that about five years from now, every company is going to be a blockchain company.
Mike: Got you. It's going to be interesting. There definitely, in my opinion, seems to be an identity crisis of sorts coming. I want to get your opinion on this, but the way that I see crypto right now, a lot of the folks who aren't in the space who saw this big crash or market dip or whatever you want to call it last year, now have kind of these theories about the market and all these different things. But you still have a wave of institutional money coming in who know they want to stabilize and mature and kind of build their own brand within the industry or whatnot.
You have this new emerging sector of sorts as I would call it of kind of tokenized securities or Wall Street blockchain. Kind of these bigger companies like Fidelity or Bocked or others coming into this space. Of course, you have like your anonymous crypto twitter. All of these hardcore cryptocurrency enthusiasts who have been around since 2010, 2011, 2012, who have had some serious impact on the normal cryptocurrency enthusiast. Philosophically, those on the hardcore crypto side, be they millennials or not, don't trust these larger organizations.
Where do you kind of see this playing out as we go further into the future and see your mainstream, traditional finance, your mainstream media, these larger corporations coming into this space, interacting with this user base or these enthusiasts who have been in it for a while under these anti-corporation philosophical underpinnings?
David: You know what? I think the diversity of opinion is what makes this space incredible, and let's remember where bitcoin came from. This is something that I try to remind people all the time, even when I'm in corporate boardrooms. It came from the libertarian ideal of we can't trust anybody, so let's go and create a system that is trustless. That is a magical thing that they created and that's the fundamentals of this technology. I spent far too much time when I do talk to, let's call it more senior executives that established companies reminding them that this industry was built primarily on young, brilliant people who are willing to break rules.
I think that's an amazing thing. We had people who simply didn't say, "Listen, there are existing modeling systems, we need to go and work within those confines, let's instead be creative. Let's create new types of trustless system." That's one of the things that's made this industry grows so very quickly. Yes, we've seen a lot of institutional money coming in. We've seen established companies taking up blockchain. I think the mix of the, let's call it the crazy crypto crowd, which I consider myself one of, and the institutional crowd, on the other end, I think both of those are going to be influencing what the future looks like.
Because where's the technology coming from? It's coming from academia, which includes many of these people who are hardcore crypto. They really are. In fact, I've met some of the most people fascinated with how crypto works working at central banks for instance. These are the people who are students of how money works, the theory of money, and they asked some of the most interesting questions and [inaudible 00:24:29] questions we're getting to hear. I think it's going to be kind of a mix of those two things. You're going to see a number of different forces, but what it will turn into is products that are consumer ready.
I don't think we've seen enough of those today. That's one of our great challenges and something that I'm very hopeful that 2019 will solve. Consumer ready products where consumers are using them every single day and they incorporate blockchain.
Mike: Got it. On that consumer ready or consumer facing product, let's say for example, you have a client who is that hardcore crypto person, but say is trying to brand themselves away from other projects in their same industry. Maybe it's healthcare or maybe it's finance or social media. For whatever reason that industry sub-sector within crypto has not seen a lot of success. Maybe some scammy projects there, whatever. Like one example that comes to mind is rewards platforms, where people talk like, "Okay, if only I could take my United air points and my Southwest air points and my Delta air points and kind of use them interchangeably.
We saw last year a ton of different reward platforms come out and many of them were illegitimate and then you had a few strong contenders. Understanding that there could be these issues with civic projects in industry sectors within Crypto, you have a new one that comes to the space trying to build their brand. Now they're having to market themselves to these two different sectors of users. Your institutional users as we'd call them, coming in, then also your hardcore crypto crazy users as we described. How do you as a PR agency manage that brand so that you don't necessarily hurt each audience who might be interested in using this projects, consumer facing product?
David: I don't think technology sells itself, but great technology solves a whole lot of problems. If you build an incredible system, it's going to appeal to everyone in the stack and the people like me who very much believe in blockchain, very much believe in crypto and where this is going, we're going to be just excited if we get to actually have, for instance, airline miles that are tokenized as a person who has no idea how blockchain works, but simply wants a better way to, let's say they are an airline or they were a hotel chain, to make less expensive their rewards pool and make sure the people claiming those rewards are actual users.
For instance, I think you bring up actually an interesting area. It's one of the ultimate low hanging fruit in crypto is what if we could tokenize loyalty points? It just makes so much sense and we haven't seen that many implementations yet that had been very successful. One of those is because we haven't seen critical mass. We haven't seen a large consumer company that has existing millions of users utilize one of these systems very broadly. Because it's possible that they could simply turn on the lights overnight and have millions of users with crypto wallets with some sort of tokenized loyalty points in there today.
Of course, they're going to face an enormous amount of hurdles getting there and lots of board approvals, etc. But that's one of the things that could make crypto mainstream and it's something that I'm rooting for quite a bit. We'll get there, but it's going to require education for everyone in the stack, in the enterprise kind of make those decisions. If this is one of those systems that allows you to trade loyalty points between different individuals, you're going to have to go and work with a lot of different law firms and compliance experts.
You're going to need to work, if you're working with different partners, let's say you're an airline that has a number of other airlines that you're working with, you might have to go and negotiate terms with all those other airlines. That's a lot of red tape and it's going to take time to do, but it seems like a really good use case. That having been said from our perspective, when we're distinguishing these, let's pretend that a company like this, we're going to be focusing on what does the product actually do today, what problems is it solving today?
In this case, it might mean saving 70% as an example of how much it costs to deploy a loyalty system relative to what traditional loyalty systems cost. If you can save 70% while doing the exact same thing, you have a product that everyone should be using and then if you actually make it easier to use or more effectual, if I could take my Burger King points and give it to somebody else who loves Burger King and maybe I far prefer Mcdonald's and we could swap points that way. Burger King is going to go and have more customers going to it, what's going to benefit them. Mcdonald's will as well and kind of everyone wins.
That's the theory here. We're going to get there, but it requires a ton of education and from the PR agency standpoint, it's how can we make sure to identify the actual problem sets, articulated well enough, substantiate it so people are actually reasonably convinced that this is something they should check out, let them check it out and then let the tech prove itself.
Mike: Beautiful. I love it. I think that's a perfect way to sum it up. The tech is what's going to take us there essentially.
David: The products.
Mike: The products. Right, exactly. Interesting. Then when you guys look at potential clients coming your way, are you looking at ICOs or STOs or newer projects or are you looking for then those with that product that you can take and help gain user adoption for?
David: We work with, as I mentioned earlier, about 65 different companies today and not just companies, but organizations like for instance working with Dash Coin and Dash is quite different than working with let's say Indiegogo for instance. This keeps it interesting and because blockchain is used in so many different industries every single day, we're excited. The types of things that we look for when we conduct our due diligence and we spend a lot of time doing DD within the agency is we're looking for some of the same things that any reasonable investor would be looking for, but we're looking for it for a different reason.
On the PR side especially we're looking for do we have news to report? Can we take this organization and help make it meaningful to reporters who are the people who we have to continuously build faith with each and every day and prove ourselves? Do we have something here? Is there a spokesperson who's really interesting? Is there a technology that's solving real problems? Is there a thought leader who could actually go and better educate the market or explain the nuances of something that's really hard to do? We get to provide an avenue for that person to broadcast that message.
If that's the case, like that's part of the stuff that we're looking for and it meets that criteria, we're very interested. We tend to work with companies who are more established, but many of our clients that we have become established while working with us. I've been working with Dash very luckily since July 2016, Lisk since September 2016 and Cardano through IOHK since the end of 2016 and a number of other companies for quite a long time and we've been lucky enough to grow with them.
Mike: Got it. Those are three huge cryptocurrency companies. Top 100 cryptocurrencies. Are you holding cryptocurrency yourself or are you an investor yourself? If so, what are some of the projects you're seeing these days that are kind of perk in your interest?
David: Well, I always loved bitcoin, ethereum and a number of other cryptocurrencies. I certainly do hold a few and wouldn't want to talk about my specific holdings, but I will say this in terms of ones that I really like and that I think are very interesting, are ones where you can use the token today. There's a number of others where the maintenance are coming online very soon. I think it's gonna be very exciting where you're gonna see real applications built off this and the tokens will be fascinatingly useful.
But things like stein. Stein never did an ICO for instance. People don't talk about that nearly enough and yet it's turned into a real depth because they built a blockchain specifically engineered for what stein would become with stein and it's useful today. There are people today using stein to increase their voting power. They're using stein to talk on the system, sorry to blog on the system, to get rewarded for it and for curating content. Many, many, many dozens and dozens of apps have been built off of that, that only use the stein protocol. I think that's the type of stuff that I want to see far more of.
Mike: Got you. You guys have done a fantastic job with all the clients really you've seen. We see Wachsman at all the conferences we go to and the exposure there for those projects are fantastic. Let's say you have a client come on or even if it's not a client. It seems to be that even today in 2018, 10 years since bitcoin, we still have these projects, exchanges, wallets, ICOs, that continually get hacked. Trying to think of a worse PR disaster in crypto is hard to think of other than you taking in someone's money and then it being gone. What do you think from your perspective, this does for a project's brand and credibility in the space? Can they recover or is it just pretty much game over?
David: We've seen it before plenty of times. Unfortunately, that's the nature of having crypto and public blockchains. This is some of the things that make it strong and give it great value. The fact that bitcoin, for instance, can be transacted from one person to another and there's no charge backs that are with credit cards is also a weakness. The fact that you hold your private keys or can hold your private keys, which it's an empowering thing, but it also means that you're responsible for it and people aren't used to that type of responsibility.
They're not used to taking the custody of their own assets in traditional means and that's why lots of these different systems including ones where private keys are held by other people like for instance, Coinbase, which has proven to be very, very useful for many custody solutions that we're seeing far more of that are imposed for regulatory reasons and that are going to provide additional layers of safety. These things are coming into play. But again, this is the power and weakness of blockchain assets is that sometimes they can be hacked and it is a big problem. It's a big problem.
We have had occasions we worked with some companies that have endured such detract before and they've recovered. What they've done is they've been very transparent and this is very important to do. Do not hide something. There's to be no cover up here. If something happens, tell people what happened. Give them as much information as you can while you're trying to go and solve the problems behind the scenes. Then make sure to keep people updated as often as you possibly can with as clear message as you can so that people aren't confused or think that one thing's happening, but another thing really is.
People trust those who open themselves up. We've seen that transparency is a hallmark of our entire industry, and it really does actually prove true in public relationships traditionally. Doubly so in blockchain.
Mike: Yep, I'd agree entirely. People always seem to be willing to forgive if you come out and say, "Hey, we screwed up here," or "Hey, this happened or whatnot." An enigma catalyst is a project that I think of where they had an issue during their fundraiser. They handled it incredibly well. From the last I saw a handful of months ago, they're continuing as is. I would agree it's possible, but you have to handle it in the right way, whether it's being hacked or whatnot.
David: Well, it helps for instance the enigma team are brilliant guys at MIT who are working on something that's really, really important. Again, it helps that the people there who have shown up at conferences. I think this is another important thing that the company should do. Go to conferences. Why should you go to conferences? Go answer everyone's questions. Please step out there in public and with talk the bitcoin maximalists, answer every question they have, do it in front of other people. If you do that sufficiently, I think you're going to go and win a lot of people over. That is provided you have good answers.
Mike: You got to have that prerequisite figured out for sure. Well, this insight is fantastic. As technology has changed different parts of our lives over the past 10, 20, 30 years, when it comes to PR and tech, Twitter especially these days seems to cause more problems than good for a lot of companies. Like the one that people refer to now is obviously the Elon Musk piece and how that was kind of a disaster or a story or entertainment or whatever you want to call it in its own right. As for crypto, what are your thoughts? What is your take on the YouTube influencers and the anonymous crypto Twitter folks who, be they one person or a small community of people, they hold it a ton of impact on the community?
I follow a ton. I take thoughts from there and apply them to some tokens I'm investing in or just kind of my overall thought process on crypto and where we are today versus a time when I wasn't in this space like say 2010, 2011. From your seat, how do you guys kind of engage with these parties like YouTube influencers or anonymous crypto twitter folks to gain that impact that they have over the crypto community?
David: Well, I think it's very important that everybody have a voice. I think that you need to have people opining and what I do think news organizations should be doing particularly is providing a credible response to companies that are making assertions, to people that are making assertions in general and provide real hardcore analysis. The more of that, the better. But I think the anonymity is a very important thing to exist as well. I think whistleblowing and protection for that is critical.
We need to make sure that a scam would be called out and that great projects and great organization and great people are praised when they deserve it. I think that in general, and I know I'm generalizing when there's a million different variables here, but we've seen a lot of good come from this. We've seen a lot of companies who have had products grow because there's been a real [inaudible 00:39:14] of people who simply, the Dash community for instance. They really believe in what they've been building for four and a half, five years, and they're going to go out and force and talk about what's going on in Venezuela.
I think that there needs to be more conversation about things like that and if traditional media is not picking it up, I think the social media could carry that weight. At the same time, there is a space for journalists. This is something that I think needs to be talked about too. Journalists have access, direct access to sources and they can do the homework and they've got the traditional training that I think helps them ask hard questions and find out what's truly newsworthy to make sure that their audiences are sufficiently educated.
They have checks and balances within their news organizations to make sure that things are factual and the more factual reporting we have in the industry, the better. The sites out there that are doing this and there's more popping up every day who are doing the real analysis and rigorous analysis of what's going on. Those guys are what's bringing us forward by year.
Mike: Yep. I couldn't agree more. Absolutely. As far as the space goes then and where we are now, you have your price action, you have your price of bitcoin, you know your market cap, all that, but then you also have regulation surrounding crypto as well. Those two have at least for the last four or five years seem to have been like major topics, as it relates to cryptocurrency growing or gaining this mass adoption or whatnot. I know this is kind of a general question, but first from a regulatory standpoint, where do you think we go from here? Do we need more regulation? Do we need less regulation? Can regulation solve some of the problems we have? What do you see coming next in 2019?
David: A couple of things. We've seen some countries who've done a really good job of figuring this out. Switzerland for instance, they have defined rules for what is a utility token, what is a security token, what is a cryptocurrency? Which is something a little bit different and they're able to go and make these determinations based on a rubric they put together and they worked with experts to do this. I'm not saying everything's perfect, but systems like that are going to be helpful.
It lets people know that they're doing the right thing. They're not doing anything improper. The clarity of regulation I think is just important as whether or not to have an understanding where you can be creative is very, very helpful for companies that basically exists in traditional means. They have payroll. If you're a large enterprise for instance, let's go back to the hotel chain that we were talking about hypothetical one who might onboard millions of people into using a loyalty point that uses crypto somewhere.
Those guys, they have shareholders, they've got thousands of employees, they've got real properties, they've got [inaudible 00:42:05] mortgages. They've got an enormous amount of variables under their control. For them to make a decision like we're going to employ blockchain technology to make our loyalty system less expensive and get more effectual, they need to know that they're doing things properly. There's a lot of lawyers in this industry. There's a lot more today than there were a few years ago and I think you can probably see, if not one to one damn close to it, that the more lawyers who have joined the space to some extent the better things have been.
It allows for more money to be put towards the development and research of great blockchain protocols towards the development of applications that are going to be widely employed quickly. Not everything can grow from the very beginning. I think that we're going to see a lot of that. That's primarily what we've seen so far are organizations like I'll mention Dash again, where it started and just kind of grew over time. Like those things are wonderful and we need to champion those, but a lot of time incumbents are going to come out with their own systems and they can't do things unless they have some sort of certainty.
They're still going to be slow reactors and the startups, so startups have a huge headstart in many ways. They don't start having as much red tape, but having some sort of certainty is gonna be very helpful. Countries that get it, that realize that this is gonna happen regardless of whether or not you regulate it, we're going to see innovation and that are willing to go and put together a clear rule books that allow for innovation to happen. They're going to see simply more talent flooding into it, more companies setting up there and more educated people taking jobs in the industry, which is going to give them a headstart and that's something that I hope that every other country on earth is looking at and saying we need to follow that model.
Mike: It's preach. Amen. I think that's a huge issue in the U.S. I foresee a big issue with the U.S. falling behind with talent, with growth and GDP. Certainly not as significant to the U.S. as it might be for like Malta or Singapore. But you all are an international company, what countries other than Switzerland and in Malta and Singapore, are you seeing kind of emerging as crypto friendly countries?
David: Well, certainly Gibraltar is one where for instance, we have the opportunity to work with them and these guys are making enormous headway and trying to make sure that a, the rules are defined and that b, there's an opportunity for companies looking to set up. We're seeing a number of other countries that are really looking at this. Hong Kong is not quite a country, but they're looking at this quite a lot. Japan has gotten to me at least far more clear over time.
I think we're going to see new rule sets in a lot of different countries in 2019. This has been accelerated by the rise of crypto in 2017. It has had many different impacts and one of those has been people are paying attention. Yes, that's a challenge. It's the inhibition or the lack of inhibition from regulators has let the Internet become what it is today. But the fact that people knew that they were playing in a safe space, was also a reason why the Internet was able to succeed.
When it was defined that they weren't going to be effective like when [inaudible 00:45:13] for instance was being implemented, that people knew that they weren't going to have a problem for starting up a company that required more bandwidth, for instance then than another and they could be other startups set up that way. Great regulation is going to be very, very good for the industry, of that I'm completely convinced.
Mike: Got it. Let's say we don't get that great regulation, like worst case scenario, something comes out, the specific countries, be it the U.S. or otherwise just are fed up with some of the issues they're seeing. Some of the ways maybe retail investors are getting harmed and we get some sort of sweeping regulation in the U.S. or internationally that puts some of your clients brands at risk where they do not as they have been set up or as they have raised funds or whatever, all under that sweeping regulation. How do you guys handle that so that their users, their investors don't just immediately dumped the token and forget about the project and the project is able to kind of continue and remedy their legal structure and go from there?
David: The priority is what the lawyers say, regulation is going to come as it is. That's something that no one has control over. But lawyers are there to help figure out the best approaches and create the right types of structuring. That's why I was mentioning earlier, great lawyers are in increasing grade supply and something that all these projects are relying on. We work with a number of different law firms that we personally trust and that we've gotten a lot of great counsel from overtime and I think most of the crypto projects and certainly our clients, they're working with these top tier law firms in a number of different jurisdictions that have specialized knowledge and know what to do.
What it comes down to is figuring out where to go next or how set up. We've already seen and I'm not saying that this happens regularly, but we've already seen examples in our industry of companies set up from one country that moved to another. They've done that because it was the best thing for their user base, for their customers, for themselves and for their ability to continue to innovate and have the freedom to do so. We've seen that it happened before and I'm afraid it would probably happen again if there were some of [inaudible 00:47:29].
Mike: Got you. Well, enough about regulation. Are there some examples you can point to from a PR standpoint that you see in the crypto space of projects just knocking it out of the park? Maybe they were small companies originally who because of really strong PR and messaging and communication have grown, or maybe they're traditionally large crypto companies that have just done a good job of staying number one. What are some of those good examples?
David: Well, I think they're many, but I don't think PR is the driving force behind it. I think that's something that's a bit of a misunderstanding. PR helps communicate the virtues of a company that's already virtuous. That's what it does. It helps better articulate something that other people are already doing. We're not the architects for instance, nor is any other PR agency behind a great technology. We're not the ones who had that killer idea to figure out how to use proof of state for instance, to save energy as an example while still maintaining security. Like the way the folks at Cardano have done.
It's a brilliant innovation, but at the same time it's hard to articulate that and where we come in is helping them in terms of figuring out, okay, well you've got this great tech, how are you going to make sure that all the relevant stakeholders are going understand? How are developers going to understand that you do have the supporting libraries, that you do have the tools, that you do have the customer service that's something like Horizon formerly known as mCash has. They've got accustomed for service line essentially where they want people to come on board and kind of how they work.
Our job is getting the memo out about what it is that they do and the ones that are doing great things, I find it kind of responsibility of some of the PR agencies out there and more importantly of journalists to go out there, find the stories that are interesting, the companies that are making great innovations and actually solving real problems and to tell that story because in my mind that's quite newsworthy.
Mike: Got it. Couldn't have said it better myself. It's communicating that difficult tech or product or whatever that is so technology forward if you will, that can be difficult. But that Wachsman does a great job of. Let's fast forward a little bit this time next year, what do you see as the story? 2018, we've seen obviously the market dip and stablecoins and regulation and all these different things. But if you had to fast forward to the future, are there any kind of trends emerging or stories emerging that you think will be a big driver of 2019?
David: I think we're going to see an enormous amount of tokenized securities and I think the reason we're going to do so is simply because they can be less expensive and it's a little bit easier for them to be liquid, which is something that's very hard to do for certain types of assets that were previously illiquid. That's going to be, I think, a big story is that the huge rush of companies in the let's call them traditional security space that are simply tokenized.
There are advantages to it and as I've tried to say before, even if it were 5% better, that is huge when we're talking about billions and billions of dollars. We've seen this innovation happen all the time. Why is IMAP better than POP3? Well, it just is. There are some technical reasons that it's better and so people shifted over to it in droves when they had the opportunity to. Tokenized securities are much the same way.
Beyond that, I think because we're going to have so many main nets up and we're going to have so many dapp developers who have been building on this and experimenting for some time, I think we're going to start see, and I know this is crazy, hundreds and hundreds of [inaudible 00:51:16] applications that people are actually using. Your phone will have dApps on it or apps that use blockchain and you'll be using them not for transactor cryptocurrencies, but just to do whatever it is that the dapp does that somehow in some way shape or form utilizes public blockchains.
If we start seeing that by the end of next year and I think we will, it's going to have a huge impact on the entire cryptocurrency industry and the blockchain industry for that matter.
Mike: I'm excited, man. We'll leave it there for sure. I can't wait to see hundreds of hundreds of dApps out there. Some really great projects that are getting there as quickly as they can. Amazing. Before I let you go, whether it's a project out there, be they the security token or crypto project or whatever you want to call it, what's the best way to get ahold of you or Wachsman as a whole? Maybe it's just an enthusiast with ideas for unique PR or something? What's the best way?
David: Wachsman.com. But we show up at a lot of conferences and we do because I want to meet people. My colleagues want to meet people, come to us, say hi, talk to us, ask the hard questions. We love it. That's how we learn. If we don't know the answer, the likelihood is one of our clients does and we'll point you in that direction. Listen Mike, thanks so much for having me. I really appreciate it. It's been a pleasure.
Mike: Thank you David. Absolute pleasure. We'll talk soon.
David: All right. Take care.