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Will Weinraub Of Cryptoys, Collectible And Playable Digital Toys, Plus: Rafi Lounge Wellness NFT, And More…
With the dawn of NFTs, the toy industry has now entered a brand new era. Instead of playing with physical toys, children can now go digital to build collectibles online and play with other people from all over the world. After observing this behavior, Will Weinraub started Cryptoys to bring toy, gaming, and entertainment worlds together and create one expansive universe. He joins Jeff Kelley, Eathan Janney, and Josh Kriger to discuss how this NFT gaming platform provides players with a refreshing yet nostalgic experience. He also talks about their groundbreaking partnership with the legendary toy company Mattel. For this episode’s Sponsored Hot Topic, Rafi Anteby shares how he helps people reconnect with their own consciousness through Rafi Lounge, the world’s first members-only Web3 lounge.
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Will Weinraub Of Cryptoys, Collectible And Playable Digital Toys, Plus: Rafi Lounge Wellness NFT, And More…
Stay tuned for this episode to learn how we hope to create the next Ninja Turtles craze with relationship magic.
Why Mattel disrupted their own category to become masters of the digital universe.
Our hot topic guest is solving for Web3 burnout, both online and in IRL in beautiful Malibu County, California. All this and more on this episode.
Don’t forget, we put together a gathering called NFTLA that brought out thousands of the world’s most innovative doers in the NFT space. Head to NFTLA.live to get tickets to our bigger, bolder, better, but just as intimate and impactful event happening in Los Angeles, March 20th through the 23rd, 2023. See you there.
Our guest is Will Weinraub, a serial entrepreneur and CEO and Cofounder of OnChain Studios, the makers of the NFT gaming platform, Cryptoys. Before OnChain Studios, Will founded the Miami-based startup Live Ninja, which was acquired in 2017. OnChain Studios has raised over $30 million from top-tier investment firms such as Andreessen Horowitz, Dapper Labs, CoinFund, Draper & Associates, Acrew Capital, and others. They also signed a multi-year partnership with a legendary toy company, Mattel. They will also invest in startups through Flamingo Capital and runs The Local Leaders Collective, an organization that helps founders overcome challenges through peer support.
On the personal side, Will is obsessed with Miami Sports, the Heat and the Dolphins in particular. He has three kids, Victoria, Kevin, and Tyler, and an Australian Shepherd, Ace. He also has a strong affinity towards good Southern barbecue and thinks the best flavor combination in the world is chocolate and peanut butter.
We could have used your collective. I have to say, shout out to the Dolphins. I’m a Patriots fan. It hasn’t been our strongest year. You guys need a little bit of time to shine. It’s been a while.
You had your decade. You did well with your 50 million Super Bowls. We need one at this point.
The Patriots are one of the most expensive franchises in the world now. Not a bad cycle there.
It pisses me off as a Dolphin fan because we had to put up with Tom Brady and the Patriots for the last several years. As soon as he leaves, now we got to deal with the Bills in Josh Allen. I thought we would have the division, but it doesn’t look like it, unfortunately.
At least on the consolation, you’re building something pretty epic here. Cryptoys, you got a portal with toys, gaming, and entertainment, all colliding on the blockchain, bringing new meaning to the word, play. It’s great to have you on the show and to hear about some of the stuff you have brewing here. We had Mattel at NFT LA. We have the sense that there was more to what they were cooking up and now the whole circle comes to us. How did this platform begin? Tell us what you’re up to.
First of all, thank you so much for having me on the show. I’m excited to be here and jam with you guys. I’m a serial entrepreneur. I got started in tech when I was a kid. I got my thousand hours of America Online via CD-ROM in the mail, for those of you that remember those days. That got me started on the internet. I was on AOL a lot and those topic-based chat rooms and got started building websites on GeoCities. I’m dating myself here, but for those of you that remember, GeoCities and Angelfire and Tripod and those free hosting sites back in the day and started building sites. That’s how I got started. I’m tech building websites for people for money. I did some consulting stuff when I was a teenager.
GeoCities should come back as a metaverse project.
That’d be sick. I’d love that. As an NFT project, they might as well bring back GeoCities. RadioShack could be relaunched. Anything’s possible at this point. That’s how I got started. I went off to Florida State University. I came out of Florida State and started my first venture-backed company that was called Live Ninja. I sold that company in 2017. This whole thing with Cryptoys started off as a side project shortly after I sold the company.
Around late 2017 and early 2018, I started learning about NFTs through Fred Wilson, a venture capitalist for Union Square Ventures. I’m a big fan of his. An early investor in Twitter and Tumblr. He had this blog called AVC. He still has it, AVC.com. He used to write every single day. Now he’s slowed down a little bit, but they wrote a blog post and he said he’s investing in this new company called Axiom Zen.
They’re renaming to Dapper Labs and they have this thing called CryptoKitties that’s coming out. He said, “Don’t laugh because they’re digital cats on the blockchain but trust me, NFTs are going to be a big thing one day. Digital collectibles are going to be a thing.” I grew up a comic book collector, collecting action figures and playing video games.
To me, digital collectibles made all the sense in the world. I started buying my first CryptoKitties back then, setting up a MetaMask wallet and whatnot and then playing around with it. I was fascinated. At the time, my daughter was about five years old. She was into these things called blind bag toys, things like L.O.L. Surprise, Hatchimals and Rainbow Corns. For those parents out there that have kids around the same age, you know what these things are. You buy them for $20, $30 at Target or Walmart.
Kids buy them home. They open up these little plastic eggs and inside is a random toy. Some of them were rare than others. I was spending hundreds, if not thousands, of dollars on this stuff. As any entrepreneur would, you get curious. You’re like, “Why this? Why are you fascinated with this? What about this is fascinating?”
I started looking up the company that made it. They were generating billions of dollars on these toys. I was fascinated by the concept and learning about this new trend in the toy industry. One day I’m working from home, my daughter screams from the playroom with excitement. She’s like, “Dad, come quick. I got it. I got the ultra-rare. Finally, I got the ultra-rare.” I go to see what she’s doing and she’s holding up this gold glittery plastic toy.
She looks at it for ten seconds and then throws it in the bin with all the other ones to collect dust like the mountain of plastic. I thought to myself, “Here is this multibillion-dollar segment of the toy industry that’s predicated on collectability and scarcity.” We can now do these digitally for the first time ever because there’s this thing that Fred’s talking about, this NFT thing. We could now bring this concept of toys to the blockchain. I go to my daughter and said, “Sweetheart, what if I were to make you the digital version of these toys where you can collect them, chase after the rare ones, but then when you get them, you could do things with them. Play games with them, interact with them. Would that be something you’d be interested in?” She’s like, “That’d be amazing. I would love that.”
I was thinking to myself, I’m like, “I got a couple of years left on my earn out, but I have my nights and weekends.” Even though I have a full-time job, I could still do a side project on the weekends. I go to my old cofounders at Live Ninja. I said, “Do you want to do a little side project with me?” I pitched them the concept and they were excited about it. Freddy joined the team. He was Emilio’s friend. They worked together back at Disney and then he worked for Konami games and a bunch of other gaming studios. He brought the 3D expertise to the project.
From 2018 to 2020, we built this little passion project. Nobody cared about NFTs at all from 2018 to 2020. We looked pretty stupid for those two years because we would go around and we sold this company, Live Ninja. Everybody in Miami was like, “You sold the company. Congrats. What’s the next move? What are you going to do next?” I was like, “I’m still trying to figure that out, but in the meantime, let me show you this digital panda that I’m working on.” They’d be like, “Aha.”
You need to spend more money on therapy at this point.
It was one of those moments. I’m like, “It lives on the blockchain.” They’re like, “Yeah, sure it does.” It was one of those things where you’re like, “These digital pandas, are they in the room with us now? Do you see the digital pandas?” We were building it for our kids, so we didn’t care. Nobody got it. In late 2020, the NBA Top Shot craze hit. That’s when we got some interest in the project from VCs and other partners. We raised a little bit of capital. What was the side project for our kids turned into now a full company. We’re over 50 employees now around the country. We raised some venture capital. We had some great partnerships and have some awesome things brewing. That’s how the whole thing got started.
Raise some venture capital. That’s a nice and simple way to say Andreessen Horowitz is investing. That’s pretty cool. We probably don’t have time to go into that in this episode, but I’d love to know how that connection came to be and what that pitch was like. Have you pitched Andreessen Horowitz before or something?
a16z, we got introduced by one of our initial investors in the company. They said, “What you’re doing is interesting. We’d love to chat more.” We got on a call with them. That’s how the introduction started. It was a first-time intro by one of our early investors.
We’ve clearly entered a new era for games, toys, collectibles. You’re a part of the initiation of that era. When you envision this future of the play paradigm, digital collectibles, NFTs, what’s in your imagination?
First of all, you talk about the toy industry in general and the deal of the concept of play. For those of you that have kids, you’ll recognize this rather quickly. The way people play is changing rapidly, especially for younger audiences. My kids have their physical toys and things that they play with in real life. They also play in digital formats as well. If you look at the way that our kids play on pads and video game consoles, you would look probably at a high level and say like I did. I’d say okay, “They’re playing video games.” It’s a different modality of video games that you and I played growing up as a kid. Remember, we played Doom as a kid. We played GoldenEye and Mario. That was the type of video game format.
When kids are playing these days, it’s a much more social experience when they’re gaming. They look at things like Minecraft and Roblox, even Fortnite to an extent. These are social experiences at its core that have gaming wrapped around the social method and modality. When my kid’s playing, he’s not playing a normal shoot-em-up game like when we played GoldenEye as a kid. His play pattern is, “Benji, meet me in that corner and let’s go build this structure together,” in Roblox.
It’s more of an after-school social activity than it is a video game that we think about. He has the methods of play in the physical world where he is like, “Come over to my house and let’s go play in my room.” He also has the virtual extension of that where sky’s the limit because all of a sudden, you could do all these different things digitally. You could play with people around the world.
Toy Industry: Video games today are more of an after-school activity. It is a virtual extension where sky’s the limit because you can play with people around the world and do different things digitally.
These kids are ebbing and flowing between physical and digital seamlessly. To them, it’s just methods. It’s not an either-or conversation. It’s very much an and conversation. The way that I see the future is very much native to that. When it comes to NFTs and digital collectibles, it makes a lot of sense for the generation that’s being born into this world because for them, this is natural.
For example, we’re Jewish, so we celebrated Hanukkah in December. The big gift that she wanted for Hanukkah, I’m like, “Sweetheart, what do you want for your eighth Hanukkah?” She ran up to her room, grabbed her iPad, and said, “Dad, I want you to authorize an in-app purchase for $99 for me in my favorite iPad game.” When I was a kid for Hanukkah, I got a bicycle. My daughter wants an in-app purchase on digital items.
You’ll appreciate that my girlfriend got me a Tom Brady rare NFT and Draft Kings for Hanukkah.
That’s a great gift right there. I bought digital items in-app purchases for years. We spent tons of money on that. It would’ve been great if I was able to say, “Sweetheart, fine, I’ll buy you $99 worth of digital items, but why don’t you sell the other thousand that you don’t play with that’s doing nothing right now? Better yet, give those to charity or to a kid that can’t afford them.” Right now, she’s unable to do neither. She has no control over those NFTs. That’s backwards. It makes no sense that my daughter can go to her room, grab a toy, any physical toy that exists there, and sell that on eBay, but she can’t do the same thing for her digital items.
You extrapolate that to the gaming industry. Think about the gaming industry. We could all go into GameStop right now and purchase a copy of Halo for $59.99. That’s our copy. I could give that to a friend. I could put it on Amazon. I could sell them back to GameStop. GameStop will probably only give me $2 for it, but they’ll still give me something at that point.
If I spend that exact same amount of money, $59.99, through the Microsoft app store and download the game digitally, I have no rights to it whatsoever. It’s the same amount of money. It’s the same product. It’s just the delivery mechanism and the rights are completely different. That’s fundamentally broken. When I look at the future of this industry as it relates to play and into gaming, I’m excited about where things are going and how things can change for the better.
Toy Industry: If you download a game digitally from the Microsoft App Store, you get no rights to it whatsoever. Comparing that to NFT, you spend the same amount of money and get the same product, with only the delivery mechanism and rights are completely different.
It’s not fundamentally broken for Microsoft. It sounds like it is people realizing they want to take back this type of ability to do this type of thing.
It will be broken for them, though, if they don’t shape up. Apple is store trying to charge 30%. It’s challenging. Jeff, I’m reflecting on what Will’s sharing and what you always say about NFTs being the building blocks of the future. Essentially, he’s manifesting that through Cryptoys.
It 100% is. The ability to do with digital assets, what we’re doing with digital assets now as opposed to strictly in-game purchases in a closed ecosystem, it’s game-changing. The smart contract approach, the 1155, changed everything. The coolest part is it’s just getting started.
Quickly follow up on the vision of the future. How do you see Flow involved? Is it the major player? What is Flow’s role in the future of all this?
Flow is clearly, again, heads and shoulders above the other blockchains that we looked at the time for what we wanted to do. The Flow blockchain, first of all, it’s much easier to get started from a development perspective than Ethereum. As with any good Web2 developer can get started in Cadence rather quickly, if they know JavaScript and they’re a decent developer, they can get onboarded pretty quickly. All fees are incredibly low.
Things are getting better in other blockchains like Ethereum and whatnot for fees, but specifically, Flow’s fees are minimal. Also, there is some architecture in the way that smart decisions were made by Flow and how it was built and architected that lends itself well for games like ours and for assets like ours. For example, there could be an NFT that owns other NFTs and is bundled together seamlessly inside of the code.
Also, something that people don’t give much credit for is that the environmental concerns, whether they have validity or not or there’s a gray area, are in the minds of a lot of big IP holders. We have these meetings with a lot of folks that license IP. Some folks that are old executives will be like, “I heard blockchain’s bad for the environment. We don’t want to get involved with blockchain stuff.”
That sentiment out there, whether there’s some semblance of truth or not, it’s still a sentiment you got to deal with. Flow, early on, they did a research report that showed that minting something on the Flow. Blockchain was the equivalent from an energy consumption perspective of four Google searches. That report helped us a lot when it came to dealing with IP partners and making these deals happen.
Also, on top of that, Dapper Labs, who made Flow, were incredible partners. To have someone like Roham and Mickey and Ridhima and the team at Dapper that I can go to for all these different things, whether it’s help with business development, licensing, smart contract support, dev support, marketing support, they’re there for us.
That’s invaluable when you’re dealing with an early-stage startup and you need e advantage that you can get. They’re great partners to have in general. Frankly, as an entrepreneur that’s been exposed to NFTs since NFTs started, I have a massive hat tip to give to Dapper because if you ask most people how they got involved in NFTs, the majority of people will give you 1 of 2 answers. Either CryptoKitties or NBA Top Shot. Both of those projects were started by Dapper Labs.
You’re talking about OGs in the space that literally built the space. They coined the term NFT. They’ve done so much. I have massive respect for the people over there. They got a great vision on where the future’s going. I talk to a lot of entrepreneurs about this when they are asked to pick a blockchain. This is bad for the space is you have a lot of maximalists. You have the ETH maxis, you have the Solana maxis, you have Polygon and Flow. There are all these great choices out there. It’s not one size fits all. There are a bunch of great choices. I encourage entrepreneurs to pick the platform that’s best for them but focus at the end of the day on utility and great user experience.
At the end of the day, if this is going to go mainstream, NFTs, in general, the mainstream consumer’s not going to care which blockchain it’s on. My theory is that consumers will care about three things mainly. 1) Is it a great user experience? 2) Are the fees low? I don’t want to pay exorbitant fees for a platform if I don’t have to. 3) Do I have true ownership in liquidity of these assets? Realistically, if I put it up for sale, am I going to be able to sell it? If you hit those three things, consumers aren’t going to care. If it’s on Ethereum, Flow, polygon, Wax, it’s not going to matter.
You dated yourself and you’re not dating.
The Powers of Grayskull, is that right?
By the power of Grayskull.
A Ninja Turtle.
Somebody had to do it.
Can you make that introduction? I’m serious.
It’s done.
Anything you care to disclose?
I did sell one of my Bored Apes.
The secret of the ooze vibe coming out of it.
That’s what we do, making dreams come true.
What is happening on this show?
11/11 at 11:11 AM
Thank you. I appreciate it, too.