Tai Zen: We’re back for part 2. So talk about what happens when your product that you just spent $50,000 to do research and you ship it in and you bring it over into the US, you start selling it and then what happens when it starts becoming successful?
15 Cent Joe: So in this hypothetical example that I’ve seen play out in similar ways, I feel like hundreds of times what happens is that you have $50,000 invested in this product, you started spending that $50,000 a year ago or 9 months ago and you’ve got the product in your hand now.
You bought a new speaker, you went to a manufacturer in India and you bought this Bluetooth speaker, but you made some changes to it, you made it really rugged, you added some carabiners to it and you have a really awesome design and a good silicone case for it. You’re really proud of this and it’s better than all the ones out there at doing what you set out to do.
So you list it on Amazon, you start selling it, it takes off, it gets 50 positive reviews in the first 3 weeks. The moment you get 10 5-star reviews, it’ll sell 5 times faster than when you had 0, and then when you get 100 it’ll sell 50% more than that. I’m just making these numbers up but there’s definitely this fluidity and these curves that seem to constantly repeat from the seller perspective.
And things are great, I’ve almost sold my initial first order and sales are actually increasing, I might actually run out of stock on these things. Then what happens is you go to sleep and you feel really good, you wake up the next day and you see that there is someone that’s now listing an item, the exact same product on that listing but it’s like $9 cheaper.
And you think to yourself how is that possible, I ordered a ton of these things and I don’t think $9 is all my margin, 100% of it, so who will be doing this? And so what you have to do now, is this person’s gonna start collecting sales from that minute they listed it. They’re gonna have the advantage of all this reputation you’ve built for this product you’ve got all this investment in.
And the buyer has no idea that someone else is claiming they have the exact same item, this has happened to me a dozen times at least. And so what happens is that they don’t have my item, this is my private label item, they might have something very similar but it’s not gonna have my brand name on it.
So what you have to do is you have to order it, and if it’s coming from E-packet, from overseas or if it’s coming from that seller shipping it, it could take a week, 2 weeks, and then you have to get the product. And as the seller you may discover it’s not even close, it might be a completely different product or confusingly similar but obviously not your product.
Tai Zen: I’ve had that happen before. So the goal of the Particl marketplace, in what you’re saying is to resolve some of these issues, in some of these friction points to help out the small business.
15 Cent Joe: I don’t have any hard numbers to back this up, but it’s my perspective that this happening has probably crashed hundreds or thousands of sellers, product inventors.
Tai Zen: So what you’re saying is that when the Particl marketplace comes out and there’s an opportunity for this little guy and the small businesses, sellers and vendors to be able to sell on a marketplace where they don’t get crushed by the owner of the platform because there is no owner of the Particl marketplace.
15 Cent Joe: There’s a lot of different ways to look at this, but from the seller perspective, I’ve personally had my businesses hurt by someone who they call this piggybacking when somebody shows up out of the blue and lists a confusingly similar but inferior or just altogether different product.
Tai Zen: I’ve ordered some stuff on Amazon before, we keep saying Amazon but there’re other vendors that do the same thing too, where the picture of the product looks the same but when you actually receive it, it’s not the same product.
15 Cent Joe: I’ve actually done Test-To-Buy. If you’re buying generic Legos from a manufacturer and you don’t control the brand they’re selling them under, then the manufacturer itself or someone else may show up and undercut you.
However if you’re selling it as a private label and someone shows up listing against you and it’s not you, chances are they’re a fraudulent seller and they’re taking advantage of the fact that they’re gonna be able to continue selling and undercutting you, effectively stealing your revenue while also ruining your reputation for that product.
And they could be getting 80% of the sales on your item for weeks before Amazon resolutions will eventually investigate it themselves by presumably sending somebody on the floor and actually grabbing this other product and doing a visual comparison to verify if it’s the same item.
And I’ve heard some sellers claim that days and weeks went by, they had lost 10 to hundreds of thousands of dollars of revenue while also potentially irreparable having the star-rating of that item be damaged due to hundreds or thousands of customers getting a product not as advertised, but not understanding what they were buying it from a piggybacker that was utilizing the fact that they were able to see how successful you were being.
So if nothing else then not having the individual items, individual sales rank publicly displayable, it’s going to add this multifaceted layer of insulation for small and medium-sized inventors and resellers. And in my opinion, it’s these smaller companies that can asymmetrically drive innovation.
If you’re this giant factory, you’re only going to be approaching a new product from the perspective of what can I produce that is effortless for me to create with my existing infrastructure.
David Fong: So in a privacy-based marketplace, you as a seller can produce a great quality product and others would not be able to know that it is a successful product to going copycat it, is that correct? I’m basically trying to understand what mechanisms in the privacy marketplace now make this a lot better.
15 Cent Joe: So my opinion is that the sales data for an individual listing not being public is the single biggest thing. With this giant Equifax hack that just happened, that’s a big deal and I’m sure I was compromised.
I’m not a developer and I don’t know what type of final data will be required from buyers and sellers for verification, but what I do know is that even with some type of rudimentary reputation system in place, it can enable you to own your listing on Particl from my understanding of how the architecture is being created.
On Amazon, for example, Amazon owns the listing which is why you or a fraudulent seller can show up and start competing with you under your own product listing.
Tai Zen: That always seems weird to me how you go and you read the reviews on 1 product and the reviews don’t even match the product that’s being listed. So basically you have a very strong investment thesis for why a privacy-centric marketplace is so valuable, not just Particls marketplace but any private marketplace.
15 Cent Joe: I cannot say that I know everything about all the existing platforms that are out there, there is definitely a lot of talent out there in the space now I’ve seen BitBay. There’s some really good programming happening like BitBay for example, I think it’s underrated.
But for me personally, coming from an activist, a bit of an investor and also having had these experiences trying to run a successful product design manufacturing business and or just simply trying to source products that I think should be more popular and trying to resell them under my own brands.
I personally view the Particl marketplace as the trifecta of all the features that I personally think would have been game-changers, and probably changed the course of consumer product design if it had been out previously. Because as it stands right now there are people at Hackerspaces and co-development spaces all over this country that have ideas that are probably really good and worth having.
But they have no idea how to get it to market without losing it entirely because getting a design patent is fairly easy, getting brand patents and copyrights, that’s pretty easy, but getting a functional patent for a new novel function, it’s almost impossible. And so it’s very difficult to invent a completely new type of item or device or service but orders of magnitude easier to continue refining or evolving what already exists.
So, in my opinion, it does not matter how good I can design a new cell phone case to make it the best cell phone case in the world, the reality is that outside of very specific features and very broad stylistic attributes, I cannot protect it. I can’t even imagine what kinds of potentially lifestyle-changing items or services could exist that may never see the light of day because these small businesses, these product developers are just so burned and they don’t really know what to do.
Your only option is to hit the ground running so hard, hundreds of thousands or millions of dollars to own the space so fully that you can make the return back that you need to justify it before anyone else can jump on to it. And as a small or medium fry, I can’t comprehend how to do that.
David Fong: You mentioned the trifecta, so what are the 3 key items in this trifecta to make this the platform that you see will make a huge difference for you?
15 Cent Joe: So having the platform be currency-agnostic is massive. So hard to describe but everyone gets fixated on a token, Ethereum is $300, they get fixated on the actual token.
And I understand why, it’s because the tokens are ascribed a value through exchanges, but a Particl token is $7 now, it fluctuates. But the value of the Particl token is completely irrelevant to the functions that the marketplace would bring to sellers, and that’s primarily my focus.
Tai Zen: My understanding is that the Particl marketplace is probably one of the first privacy-centric marketplaces that I know of that is, it will accept any token, not just the Particl token. Because when I first research it, I thought that it only accepts Particl tokens, but it accepts any token once it comes out.
15 Cent Joe: This is just me speaking from my own personal perspective. This is not at all meant to be reflective of where I believe or where I perceive development to be heading. However, to be able to bring basically any major Cryptocurrency or major token of value inside the space now, and to seamlessly bring it into this Particl marketplace, the value of Particl or the Particl conversion may eventually be just invisible to the buyers and sellers.
If the developers can add features like this in the future, they might just peg their Particl marketplace to Fiat to USD for example, and bring in whatever Crypto they have at whatever value it is. And they’re only going to see they’re bringing in Bitcoin or LTC or XMR and they’re buying goods and services at USD prices and all of the conversions are happening either atomically or through some kind of a shape-shift behind the scene.
In one of the Particl investor videos, you had mentioned why not just develop this platform on a previously existing token, and I was thinking about that. The protocol token itself gives the Particl core developers and the Particl foundation the ability to actually control the core functionality, the speed, the reliability, the security of the marketplace transactions.
So I view a Particl token as the needed fuel to ensure that this decentralized private transaction actually happens but the value of the token itself is a virtually no consequence to the transaction.
And of course as an investor, this gets me excited because this means that the value of the Particl token could scale in tremendous ways if Particl was several hundred USD, and Bitcoin tanked, it’s still irrelevant because you’re still getting the same value for your Crypto you’re bringing into the ecosystem. So currency agnosticism is gigantic.
Tai Zen: Agnostic simply means neutral, just for the audience that’s outside the US.
15 Cent Joe: So ideally my vision for Particl which I would like to see happen and I’ll push for as a passionate community member, would be to accept the majority of major Cryptos that were possible at the earliest convenience. I understand that probably a lot of testing will have to happen before we get to that point, but I’m no problem waiting.
The second one is that there is going to be some level of privacy for the seller itself. You can do whole video series from the buyer perspective of what its benefits of having it, it’d be very difficult for someone to hack your Amazon account and go and see all the items you’ve purchased.
So the privacy component and having the blockchain in the marketplace either not collected or not having a way to permanently store specific types of transactional data, particularly sales rank for example. I think that that adds this veil of protection to the sellers and obviously large profitable sellers will probably be highly represented on the Particl platform.
And some reputation system may say this seller is obviously successful and these products seem to be selling well, but I think that a great majority of the predatory piggybackers aren’t going to operate on a hunch, they’re gonna want to see the data, they’re gonna want to know that they can get in and get out and steal profit from you before you can react. And if they deny some of those basic features then I think it’s gonna encourage a more broad level of competition among sellers.
So the privacy component which I am actually unaware that any other marketplace that’s in development or existing is going to have to the degree that I believe Particl will. The third one is scale. I read in 2014, Amazon was doing 100,000 cells a minute during the Black Friday crush a couple of years ago.
Now that number could be completely fictitious, I had read it somewhere and I said that sounds incredible. If the Particl marketplace gets any level of adoption which I perceive it will, I expect it to be very niche, very specific industries, probably actually centered on contracts and services at first, freelance programmers and artists that stand by their work that are willing to do the escrow system.
Amazon has billions of dollars of infrastructure and who knows how much computing horsepower that makes that network fast. Because the Particl marketplace has a tokenized fuel, the fuel is tokenized, and that token is a speculative asset or it’s some type of asset.
And because some proportion of the fees that are collected from the marketplace transactions which I think will be quite small, if Amazon is charging 25% or 30%, maybe it’s 1% or 0.5% to sell on Particl, some proportion of that is going to go to the people that are holding and staking the token, keeping more nodes online and keeping the network fast. And so the more people are using the marketplace, I perceive the higher the value for the token to be, which means there be more aggressive push to acquire this asset, just the interest alone.
They don’t even care about why, they just know that the Particl token is generating 19% APR and that it went up 9% every month for the last 6 months and they’re gonna buy that and they’re gonna sit on it, they’re gonna stake. I’m sure there’s gonna be a lot of tweaking, necessary to eventually find the formula.
However, it’s my opinion that the speculative asset of the fuel for the marketplace, which ultimately will support the speed and the smoothness of the user interface, is going to enable it to scale. So we’ll have currency agnosticism so, except a wide variety of currencies, we’ll have some degree of seller and buyer privacy which I think is going to be the single biggest aspect of it.
And then we’re also going to have the ability for the marketplace to have a massive financial incentive as it grows for people to ensure it has the horsepower that it needs, decentralized distributed all over the world. So that way when you open up the app on your phone, it’s fast, when you go to buy and sell those transactions, the process is fast and smooth.
I said lots of tweaking but there’re probably actually 5 reasons why I’m excited about it but those are 3 giant ones.
Tai Zen: Thanks for watching this video guy, and thanks for sharing that with us and we’ll have you back, talk some more about it. Thanks for joining us here also, David.
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